Questions -
Q1. Nanyang Ltd produces a single product. The selling price is $50 per unit and the variable costs are $30 per unit. The annual fixed costs of the business are $4000. The business aims to make $10000 profit during the forthcoming year. How many units must be sold to achieve this target?
a) 700
b) 200
c) 280
d) 500
Q2. A business produces a product that generated total revenue of $16000 for the year, the business has variable costs of $5 per unit and total fixed costs of $4,500. The business sold 2,000 units of the product during the year. What is the contribution margin ratio (contribution per unit/selling price/unit)?
a) 71.9%
b) 62.5%
c) 37.5%
d) 9.4%