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Quiz No 3

This document contains 4 questions related to business and economics concepts: 1. Define backflush costing and discuss its merits and demerits in 3-4 sentences. 2. A multi-product question calculating daily profit, throughput accounting ratios, and proper interpretation for products X, Y, and Z given selling prices, material costs, throughput contributions, and daily conversion costs. 3. A question calculating price elasticity of demand given original price, demand, price increase, and resulting demand decrease. 4. A question asking to discuss three variables that influence demand.

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Syeda Tooba
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57 views1 page

Quiz No 3

This document contains 4 questions related to business and economics concepts: 1. Define backflush costing and discuss its merits and demerits in 3-4 sentences. 2. A multi-product question calculating daily profit, throughput accounting ratios, and proper interpretation for products X, Y, and Z given selling prices, material costs, throughput contributions, and daily conversion costs. 3. A question calculating price elasticity of demand given original price, demand, price increase, and resulting demand decrease. 4. A question asking to discuss three variables that influence demand.

Uploaded by

Syeda Tooba
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Quiz no: 03

Q no: 01 Define backflush costing? Briefly discuss its merits and demerits? (Marks = 4)
Q no: 02
Corrie produces three products, X, Y and Z. The capacity of Corrie's plant is restricted by
process alpha. Process alpha is expected to be operational for eight hours per day and can
produce 1,200 units of X per hour, 1,500 units of Y per hour, and 600 units of Z per hour.
Selling prices and material costs for each product are as follows.
Product Selling price Material Cost Throughput Contribution
$ per unit $ per unit $ per unit
X 150 80 70
Y 120 40 80
Z 300 100 200

Conversion costs are $720,000 per day.


Required
(a) Calculate the profit per day if daily output achieved is 6,000 units of X, 4,500 units of Y and
1,200 units of Z.
(b) Calculate the TA ratio for each product.
(c) Give proper interpretation? (Marks = 8)
Q no: 03 The price of a good is $1.20 per unit and annual demand is 800,000 units. Market
research indicates that an increase in price of 10 cents per unit will result in a fall in annual
demand of 75,000 units. What is the price elasticity of demand? (Marks = 5)
Q no: 04 Discuss any three variables which influence demand? (Marks = 03)

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