JAIIB Paper 3 Module D Quiz 3

Break-even units = fixed costs ÷ contribution per unit = ₹120,000 ÷ ₹20 = 6,000 units. At this output, contribution equals fixed costs and profit is zero.

Direct material can be traced economically to the product or job. Indirect materials are included in overheads where direct tracing is not practical.

Total cost at the stated activity level = variable cost + fixed cost = ₹120,000 + ₹70,000 = ₹190,000.

Total contribution = 1900 × ₹40 = ₹76,000. Profit/(loss) = contribution − fixed costs = ₹76,000 − ₹50,000 = ₹26,000.

Margin of safety shows how far sales can fall before the entity reaches break-even. It may be expressed in value, units or percentage.

Labour rate variance = actual hours × (standard rate − actual rate) = 160 × (₹21 − ₹19) = ₹320. A higher actual rate creates an adverse variance.

Break-even units = fixed costs ÷ contribution per unit = ₹130,000 ÷ ₹35 = 3,714 units. At this output, contribution equals fixed costs and profit is zero.

Annual straight-line depreciation = (cost − residual value) ÷ useful life = (₹280,000 − ₹30,000) ÷ 7 = ₹35,714 per year.

Material usage variance = standard price × (standard quantity − actual quantity) = ₹15 × (280 − 300) = ₹-300. Positive is favourable; negative is adverse.

A cash budget helps anticipate liquidity surpluses or shortages by forecasting cash inflows and outflows. It differs from an income statement because non-cash items are treated differently.

For a typical intra-State supply, Central GST and State GST (or UTGST in a Union Territory where applicable) are charged. Inter-State supplies are generally subject to IGST.

GST law blocks credit for specified categories, including certain motor vehicles and related services, with defined exceptions. The precise treatment depends on use and statutory conditions.

Labour rate variance = actual hours × (standard rate − actual rate) = 210 × (₹21 − ₹21) = ₹0. A higher actual rate creates an adverse variance.

Batch costing treats a batch as the cost unit and is common for pharmaceuticals, components and similar items produced in lots.

Production budget = sales + desired closing stock − opening stock = 600 + 195 − 100 = 695 units.

Contribution = sales − variable costs = ₹475,000 − ₹261,250 = ₹213,750. P/V ratio = contribution ÷ sales × 100 = 45.0%.

Within the relevant range, variable cost per unit is generally constant, while total variable cost changes with activity. Real-world step effects and price changes can alter the pattern.

The job cost card accumulates costs attributable to a job and supports job-level cost and profitability analysis.

Registered suppliers issue tax invoices for taxable supplies as required by GST law. Bill-of-supply and other documents may apply to exempt supplies or composition taxpayers.

Advance tax requires eligible taxpayers to pay estimated tax during the year in prescribed instalments, subject to thresholds, exemptions and rules.