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Home Questions JHENHUWJ3X
Target Exam

CUET

Subject

Entrepreneurship

Chapter

Business Arithmetic

Question:

Toy craft produces toy alligators and toy dolphins. Fixed costs are  Rs1290000 per year. Sales revenue and variable costs per unit are as follow:

Particulars Alligators (in Rs) Dolphins (in Rs)
Sales price 20 25
Variable Price 8 10

Suppose the company currently sells 140,000 alligators per year and 60,000 dolphins per year (Sales Mix Percentage 14:6). Assuming the sales mix stays constant, answer the following question.

What will be the contribution margin for dolphin toys in rupees?

Options:

11,20,000

6,00,000

16,80,000

9,00,000

Correct Answer:

9,00,000

Explanation:

 

Particulars Alligators (in Rs) Dolphins (in Rs) Total 
Total Units 1,40,000 60,000 2,00,000
Sales price 20 25  
Variable Price 8 10  
Sales  28,00,000 15,00,000 43,00,000
Variable Cost 11,20,000 6,00,000 17,20,000
Contribution Margin (Sales-Variable Cost) 16,80,000 9,00,000 25,80,000
Less Fixed Cost     12,90,000
Net Income     12,90,000

 

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