MCQ questions

Q4. A company has assessed the profitability of its three products as shown here: Product A Product B Product C Total Sales (units) 3,000 5,000 2,000 10,000 f f f Price 15.00 10.00 5.00 Variable costs 6.00 4.00 3.00 Divisible fixed costs 2.00 1.00 0.50 Non-divisible fixed costs 2.00 2.00 2.00 Profit/(Loss) 5.00 3.00 (0.50 As a result of this, it has been suggested that Product C should be dropped. All other things being equal what would be the financial impact of dropping Product C? (5 Marks) A Profit would increase by $1,000. B Profit would increase by $2,000. C Profit would fall by $3,000. Profit would fall by $4,000.(15. A local education institution's budget for 2020121 for meals was 944,622. During 2020/21 it is estimated that 500 students will require 3 meals a day for 196 days each at an average cost of 3.20 per meal. What should be the meals budget for 2021!22 applying zero-based budgeting, inflation is estimated at 3%? (4 Marks) A 940,800 B 944,622 C 969,024 D 972,960 06. A company is using target costing to establish whether it needs to redesign a proposed product. The following data is available: Target price 125 per unit Desired prot margin 25% The estimated cost of production 100 per unit By how much will the company attempt to reduce the cost of the product? (4 Marks) A 6.25 per unit. B 12.50 per unit. C 25.00 per unit. D The company will not need to redesign the product