NPTEL Entrepreneurship Essentials Week 8 Assignment Answers 2025
1. The following data are related to a particular company for the year 2022-2023: (All figures are in Rupees except when specifically mentioned otherwise)
Fixed cost per year: 2000
Variable cost for the year: 1500
Number of units produced and sold during the year: 100
Unit selling price: 19
The break-even point is:
a. 500
b. 400
c. 350
d. 430
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2. Which of the following is definitely not an assumption in break-even point analysis?
a. The cost can be divided into fixed and variable.
b. Change in volume of sales does not change in fixed cost.
c. Stock consumption or ‘Cost of Goods Sold’ is equal to opening stock plus purchase during the year minus closing stock.
d. Change in the volume of sales does not affect the price of the product.
Answer :-
3. The following data are related to a company for the financial year 2022-2023. (All figures are in
Rupees except when specifically mentioned otherwise)
Gross profit: 1000
Interest payment: 50
Operating expenses excluding depreciation: 400
Dividend: 100
The book value of the fixed asset of the company as of 31-3-2022 was 300. The depreciation rate
is 10%. The company purchases machinery worth 700 during the ycar 2022-23 and sells existing
fixed assets of book value of 500 during the same year. What is the operating profit of the
company during 2022-23?
a) 600
b) 480
c) 650
d) 550
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4. The following data pertain to a particular year of operation of a company. (All figures are in Rupees except when specifically mentioned otherwise)
Sales for the year: 12000
The variable cost for the year: 10000
Fixed cost for the year: 1000
Number of units produced and sold during the year: 400
What is the margin of safety?
a. 500
b. 300
c. 100
d. 200
Answer :-
5. Estimate the contribution margin (on per unit basis) in ‘Rupees per unit’ using the following data.
- Sales: ₹ 9000
- Number of units produced and sold: 100
- Total variable cost: ₹ 7000
- Annual fixed cost: ₹ 5000
a. ₹ 40
b. ₹ 20
c. ₹ 10
d. ₹ 30
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6. For a company, the fixed cost F = 40,000 for a year, the variable cost V = 20 per unit, selling price S = 30 per unit. How many units the company should produce and sell to make a profit of ₹10,000?
a. 5,000
b. 5,500
c. 10,000
d. 6,500
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7. By applying a lean start-up process a company has reduced its variable cost by 10% without changing the fixed cost. What will happen to the operating leverage?
a. It will go up
b. It will go down
c. No change since operating leverage is related to fixed cost.
d. The question is inappropriate since both fixed cost and variable cost are unrelated to operating leverage.
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8. Which one of the following is not a direct expense?
a. Raw material
b. Selling and marketing
c. Packaging
d. Wages
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9. The unit selling price of a product: 300
Total all-inclusive variable cost per unit: 200
Total all-inclusive fixed cost per year: 2,00,000
What is the breakeven point in number-of-units?
a. 1,112
b. 2,000
c. 10,000
d. 20,000
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10. Which of the following is correct?
a. The profit before tax is the money that belongs to the owners
b. A positive margin of safety does not necessarily mean that the company is operating in profit.
c. A company’s capacity to absorb raw-material price fluctuations can be gauged from the difference in the slopes of the sales line and total cost line.
d. Financial leverage is the degree to which a firm can increase operating income by increasing sales.
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