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%