What is the gross profit for the year

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Reference no: EM133164232

Question 1:

Thyme Ltd manufactures cameras. The company wants to achieve a target profit of £150,000 per year. They have annual fixed costs of £500,000, variable costs of £100 per camera, and they sell the cameras for £300 each. How many cameras do they need to sell to achieve their target profit?
Question 1 options:

3250 cameras

2500 cameras

2167 cameras

1625 cameras

Question 2:

A company makes office chairs. It has fixed costs of £180,000. Its variable labour cost is £25 per unit and its cost of materials is £50 per unit. It sells its chairs for £250 each. What is the Break Even Point (BEP) in units?

options:

1029 units

72 units

800 units

900 units

Question 3:

Which of the following is a disadvantage of the Net Present Value method of investment appraisal?
options:

NPV uses profit in its calculation, which can be subjective

NPV does not use all the cash flows of a project

NPV does not consider the time value of money

NPV uses complex discount rates, which can be difficult to determine

Question 4:

A manufacturing company has electricity costs which are £4,000 when 6200 units are manufactured. The electricity costs are £2,900 when 4000 units are manufactured. What would the electricity cost be if 7,200 units were manufactured?

options:

£5,220

£4,500

£4,645

£4,400

Question 5:

An electricity bill covers the 3 months from December 2020 to February 2021. The bill is not received until March 2021. The bill comes to £450, and electricity is believed to be used evenly across the period. What adjustment is required for electricity cost at the end of December 2020?

options:

£150 prepayment

£150 accrual

£450 prepayment

£450 accrual

Question 6:

Which of the following is the definition of the internal rate of return (IRR)?

options:

The discount rate at which the NPV (Net present value) of a project comes to zero

The interest rate which makes a project profitable

The NPV (Net present value) at which a discount rate of a project is zero

The amount of profit made by a company as a percentage of its initial investment in a project

Question 7:

The interest cover ratio of a company has fallen. What could be a possible cause?

options:

The company has repaid its overdraft

The company has made more operating profit

The bank has charged a lower interest rate

The company has taken out new loans

Question 8:

The gross margin of a company has fallen. What is the most likely cause?

options:

The company has purchased new fixed assets during the year

The raw material prices have increased

The cost of advertising has increased

The interest rate on the company's bank loan has increased

Question 9:

A company has the following costs and incomes during the year:

	£'000
Depreciation expense	(200)
Cost of sales	(1,580)
Advertising	(270)
Insurance	(600)
Sales income	4,750
Interest expense	(50)

What is the gross profit for the year?

Question 19 options:

£2,370,000

£2,970,000

£3,170,000

£2,320,000

Question 10

The materials budget for 500 items is £750. What would be the flexed materials budget if the company made 700 items?

options:

536

1050

500

900

Reference no: EM133164232

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