Performance Management MCQ Quiz in मराठी - Objective Question with Answer for Performance Management - मोफत PDF डाउनलोड करा
Last updated on Apr 1, 2025
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Performance Management Question 1:
Jim Bowen has been trading for the last six months as a fast food retailer. His average contribution sales (C/S) ratio for that period was 33%, on sales of $120,000. His total fixed expenses were $25,800. He is considering employing an extra member of staff as he anticipates an increase in business. The cost of the new employee will be $18,000 per year. To stimulate sales, Jim will also reduce his C/S ratio to 30%.
What percentage increase in sales is needed for Jim to earn the same operating profit in the next six months as he earned in the first six months?
Answer (Detailed Solution Below)
Performance Management Question 1 Detailed Solution
The correct option is option 3.
Additional information:
| $ | |
| Contribution (120,000 × 34%) | 39,600 |
| Less Fixed costs | (25,800) |
| Existing operating profit | 13,800 |
In the following six-month period, contribution margin (C/S ratio) will fall to 30%. Fixed costs will increase to $34,800 (25,800 + ½ × 18,000). Target operating profit required is 13,800.
Revenue required to achieve target profit= target profit + fixed cost
C/S ratio
Therefore, required revenue = (13,800 + 34,800)/0.3 = 162,000. This represents a 35% increase over the first six months of the year.
Performance Management Question 2:
A division manufacturing a single product which sells for $325 has the following unit cost structure:
| $ | |
| Direct materials | 95 |
| Direct labour | 78 |
| Variable overheads | 56 |
| Share of fixed costs | 45 |
| Total cost | 274 |
In the coming period, the budgeted production volume is 10,000 units.
What is the budgeted break-even sales volume (to nearest unit)?
Answer (Detailed Solution Below)
Performance Management Question 2 Detailed Solution
The correct option is option 2.
Additional information:
Breakeven point: Total fixed costs
Contribution per unit
Total budgeted fixed costs = Budgeted cost per unit × budgeted production = 45 × 10,000 = $450,000
Contribution per unit = Selling price − variable costs = 325 − (95 + 78 + 56) = $96
Therefore, break-even point = 450,000/96 = 4,687.5 units i.e. 4,688 units
Performance Management Question 3:
Graytun Co has a production capacity of 280,000 units per year. The budgeted sales volume for the next year is 256,000 units and the break-even volume is 167,000 units.
What is the margin of safety ratio?
Answer (Detailed Solution Below)
Performance Management Question 3 Detailed Solution
The correct answer is option 2.
Additional information:
Margin of safety ratio = Budgeted sales - break even sales
budgeted sales
= (256,000 − 167,000)/256,000 = 34.8%
Performance Management Question 4:
Mario operates a small business that makes pizzas and delivers them within a two-mile radius. The variable cost incurred to make and deliver one pizza is $2.15. The average price charged is $6.50 per pizza, including delivery. Mario estimates the annual fixed costs of his business are $40,000, including salaries of $24,000.
What is the break-even number of pizzas per year for Mario’s business (to the nearest unit)?
Answer (Detailed Solution Below)
Performance Management Question 4 Detailed Solution
The correct answer is option 3.
Additional information:
Contribution per unit: $6.50 − $2.15 = $4.35
Break-even = Fixed costs/contribution per unit = $40,000/$4.35 = 9,195.4 i.e.
9195 to the nearest unit.
Note: There is no need to deduct the delivery from the price - as this is part of the price that the customer pays for receiving the pizza. The costs of delivery are also included in the variable cost per unit.
Performance Management Question 5:
A company manufactures a product that requires four hours per unit of machine time. Machine time is a bottleneck resource as there are only 10 machines that are available for 12 hours per day, five days per week. The product has a selling price of $130 per unit, direct material costs of $50 per unit, labour costs of $40 per unit and factory overhead costs of $20 per unit. These costs are based on weekly production and sales of 150 units.
What is the throughput accounting ratio (TPAR) for the product (to two decimal places)?
Answer (Detailed Solution Below)
Performance Management Question 5 Detailed Solution
The correct option is option 1
Additional information:
Return per factory hour = ($130 − $50)/4 hours = $20
Factory costs per hour = ($20 + $40)/4 = $15
TPAR = $20/$15 = 1.33
Performance Management Question 6:
Zul Co manufactures a single product, the Zoot, which is made from a mix of two chemicals: A and B. The company accounts for environmental costs using input/output analysis. Chemical A costs $1,000 per tonne and chemical B costs $1,500 per tonne. Any chemicals which are wasted in the production process must be disposed of at a cost of $250 per tonne. June's production run used 10 tonnes of chemical A and 50 tonnes of chemical B. Total output of Zoot was 54 tonnes.
What is the environmental cost of June's production run?
Answer (Detailed Solution Below)
Performance Management Question 6 Detailed Solution
The correct option is option 4.
Additional information:
| Input (Tonnes) | Cost per tonne | Total cost | |
| Chemical A | 10 | $ 1,000 | $ 10,000 |
| Chemical B | 50 | $ 1,5000 | $ 75,000 |
| 60 | $ 85,000 |
Performance Management Question 7:
Which of the following statements about the theory of constraints is false?
Answer (Detailed Solution Below)
Performance Management Question 7 Detailed Solution
The correct answer is B.
Non-bottleneck resources should NOT be operated at full capacity.
Non-bottleneck resources should operate at the maximum throughput of the bottleneck resource. Operating them any faster would result in tying up resources in incomplete work-in-progress.
Performance Management Question 8:
Curtis runs a printing business. He estimates that his printing machine will need to be set-up 200 times per month, at a monthly total cost of $80,000. Item 2145 has to be printed in batches of 50 copies, where each batch requires the machine to be set-up twice. Curtis expects the annual demand for item 2145 to be 5,000 copies.
What amount should be charged to each copy of item 2145 for set-up costs ?
Answer (Detailed Solution Below)
Performance Management Question 8 Detailed Solution
The correct option is option 1
Additional information:
Activity rate is $80,000/200 = $400
cost per copy is ($400 × 2)/50 = $16
Performance Management Question 9:
The predicted selling price for a product has been set at $56 per unit. The desired mark-up on cost is 25% and the material cost for the product is estimated to be $16 before allowing for additional materials to allow for shrinkage of 20% (for every 10 kg of material going in only 8 kg comes out).
If labour is the only other cost and 2 hours are needed what is the most the business can pay per hour if a cost gap is to be avoided? The maximum rate per hour is (2 d.p)
Answer (Detailed Solution Below)
Performance Management Question 9 Detailed Solution
The correct option is option 2
Additional Information:
| $ | |
| Selling price | 56.00 |
| Profit (56 × 25/125) | 11.20 |
| Target cost | 44.80 |
| Material cost (16 × 10/8) | 20.00 |
| Labour – 2 hours | 24.80 |
| Labour rate per hour = 24.80/2 | $12.40 |
Performance Management Question 10:
Which of the following statements about activity-based costing is/are TRUE?
- It is not relevant for service industry businesses.
- It is based on marginal costing principles.
Answer (Detailed Solution Below)
Performance Management Question 10 Detailed Solution
The correct answer is C.
Both statements are not true.
ABC can be used in service industries as well as manufacturing, so (1) is not true.
Marginal costing implies ignoring fixed overheads. ABC apportions all production overheads, whether fixed or variable, so (2) is also not true