AFM Numerical Part 1 [10 Questions]

JAIIB Exam Study Material: AFM Numerical Part 1 [10 Questions]

ABC Ltd produces specialized digital cameras. During the financial year ended, it sold 10,000 units for 15,000 each.

Total manufacturing costs for the period - 82,400,000
Cost of work in progress at the start of the period - 2,250,000
Cost of work in progress at the end of the period - 2,400,000
Cost of finished goods inventory at the start of the period - 32,800,000
Cost of finished goods inventory at the end of the period - 34,400,000

Based on the above information, calculate ...

1. Cost of goods manufactured during the period

a. 69,350,000
b. 80,650,000
c. 82,250,000
d. 115,050,000

Ans - c

2. Cost of goods available for sale

a. 69,350,000
b. 80,650,000
c. 82,250,000
d. 115,050,000

Ans - d

3. Cost of goods sold

a. 69,350,000
b. 80,650,000
c. 82,250,000
d. 115,050,000

Ans - b

4. Gross profit

a. 69,350,000
b. 80,650,000
c. 82,250,000
d. 115,050,000

Ans - a

5. Gross profit margin

a. 25 %
b. 33 %
c. 46 %
d. 57 %

Ans - c

Solution

1. c
Cost of goods manufactured during the period - Total manufacturing costs for the period + Cost of work in progress at the start of the period - Cost of work in progress at the end of the period
= 82,400,000 + 2,250,000 – 2,400,000
= 82,250,000

2. d
Cost of goods available for sale = Cost of goods manufactured during the period + Cost of finished goods inventory at the start of the period
= 82,250,000 + 32,800,000
= 115,050,000

3. b
Cost of goods sold = Cost of goods available for sale - Cost of finished goods inventory at the end of the period
= 115,050,000 – 34,400,000
= 80,650,000

4. a
Gross profit = 15,000 × 10,000 – 80,650,000
= 150,000,000 – 80,650,000
= 69,350,000

5. c
Gross profit margin = 69,350,000 ÷ 150,000,000
= 46%
.............................................

Given the following information:

Particulars Rs.
Inventories 50,000
Trade receivables 50,000
Advance tax 4,000
Cash and cash equivalents 30,000
Trade payables 1,00,000
Short-term borrowings (bank overdraft) 4,000

1. Calulate Current Assets

a. Rs. 80,000
b. Rs. 1,04,000
c. Rs. 1,24,000
d. Rs. 1,34,000

Ans - d

2. Calulate Current Liabilities

a. Rs. 80,000
b. Rs. 1,04,000
c. Rs. 1,24,000
d. Rs. 1,34,000

Ans - b

3. Calulate Quick Assets

a. Rs. 80,000
b. Rs. 1,04,000
c. Rs. 1,24,000
d. Rs. 1,34,000

Ans - a

4. Calulate Current Ratio

a. 0.77 : 1
b. 1.29 : 1
c. 1 : 0.77
d. 1 : 1.29

Ans - b

5. Calulate Quick Ratio

a. 0.77 : 1
b. 1.29 : 1
c. 1 : 0.77
d. 1 : 1.29

Ans - a

Solution:

1. d
Current Assets = Inventories + Trade receivables + Advance tax + Cash and cash equivalents
= Rs. 50,000 + Rs. 50,000 + Rs. 4,000 + Rs. 30,000
= Rs. 1,34,000

2. b
Current Liabilities = Trade payables + Short-term borrowings
= Rs. 1,00,000 + Rs. 4,000
= Rs. 1,04,000

3. a
Quick Assets = Current assets – (Inventories + Advance tax)
= Rs. 1,34,000 – (Rs. 50,000 + Rs. 4,000)
= Rs. 80,000

4. b
Current Ratio = Current Assets / Current Liabilities
= Rs.1,34,000 : Rs.1,04,000
= 1.29 : 1

5. a
Quick Ratio = Quick Assets / Current Liabilities
= Rs. 80,000 / Rs. 1,04,000
= 0.77 : 1
.............................................