3 A company manufactures a single product which it sells for ￡15 per unit. The product has a contribution to sales ratio
of 40%. The company’s weekly break-even point is sales of ￡18,000.
What would be the profit in a week when 1,500 units are sold?
4 The following production and total cost information relates to a single product organisation for the last three months:
Month Production Total cost
1 1,200 66,600
2 1,900 58,200
3 1,400 68,200
The variable cost per unit is constant up to a production level of 2,000 units per month but a step up of ￡6,000 in
the monthly total fixed cost occurs when production reaches 1,100 units per month.
What is the total cost for a month when 1,000 units are produced?
5 Which of the following is NOT a feasible value for the correlation coefficient?
A + 1·2
B + 0·6
C + 0
D – 0·6
6 The following statements relate to responsibility centres:
(i) Return on capital employed is a suitable measure of performance in both profit and investment centres.
(ii) Cost centres are found in manufacturing organisations but not in service organisations.
(iii) The manager of a revenue centre is responsible for both sales and costs in a part of an organisation.
Which of the statements, if any, is true?
A (i) only
B (ii) only
C (iii) only
D None of them
7 The purchase price of a stock item is ￡25 per unit. In each three month period the usage of the item is 20,000 units.
The annual holding costs associated with one unit equate to 6% of its purchase price. The cost of placing an order
for the item is ￡20.
What is the Economic Order Quantity (EOQ) for the stock item to the nearest whole unit?