To General Reserve To Proposed Dividend To Balance c/d Rs. 15000 2000 8000 150

    To General Reserve
    To Proposed Dividend
    To Balance c/d Rs.
    15000
    2000
    8000
    15000
    4000
    3000
    12000
    4500
    15000
    80000
    241500
    400000 15000
    75000
    196500
    286500
    By Gross Profit b/d
    By Profit on Sales of Fixed
    Assets
    By Dividend received By Balance b/d
    By Net Profit for the year
    By Tax Refunds Rs.
    370.000
    20000
    1000040000025000
    241500
    20000
    286500
    3. What is CVP analysis? Does it differ from break-even analysis?
    4. S Limited is considering for purchase of a machine. There are two
    possible machines which will produce the additional output. Details of these machines are
    as follows:
    Machine x Machine Y
    Rs. Rs.
    Capital Cost
    Sales at standard Price
    Costs:
    Labour
    Materials
    Factory Overheads
    Administration Cost
    Selling Costs
    Expected life in years 60000
    100000
    10000
    8000
    12000
    4000
    2000
    2 60000
    80000
    6000
    10000
    10000
    2000
    2000
    3
    Other Information:
    (a) The costs shown above relate to annual expenditure resulting from each machine. Sales
    are expected to continue at the rates shown for each year for the full life of each machine;
    (b) Tax to be paid may be assumed at 50% of net earnings;
    (c) Interest on capital is to be ignored;
    (d) The appropriate rate of interest for converting to present value may be taken at 10%.
    On the basis of the facts given above show the most profitable investment by the following methods.
    (i) Pay-back Period
    (ii) Return on Investment; and
    (iii) Net Present Value on Investment.
    3. In the long run there are no fixed cost functions (total or average) since no inputs are fixed. Explain how this helps a producer in making his future decisions.
    4. Describe a Cartel. How the pricing decisions are arrived at?
    5. Write short notes on the following :
    a) Delphi Technique
    b) Economic Profit
    c) Multipart pricing

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