Data Interpretation Logical Reasoning (Part 7 of 7)

Directions: Answer these questions on the basis of the information given below:

The following table shows the break-up of actual costs incurred by a company in last five years (year 2002 to year 2006) to produce a particular product:

Year

Year 2002

Year 2003

Year 2004

Year 2005

Year 2006

Volume of production and sale (units)

Volume 1000

Volume 900

Volume 1100

Volume 1200

Volume 1200

Cost in Rs.

Below

Below

Below

Below

Below

Material

Rs. 50, 000

Rs. 45, 100

Rs. 55, 200

Rs. 59, 900

Rs. 60, 000

Labour

Rs. 20, 000

Rs. 18, 000

Rs. 22, 100

Rs. 24, 150

Rs. 24, 000

Consumables

Rs. 2, 000

Rs. 2, 200

Rs. 1, 800

Rs. 1, 600

Rs. 1, 400

Rent of building

Rs. 1, 000

Rs. 1, 000

Rs. 1, 100

Rs. 1, 100

Rs. 1, 200

Rates and taxes

Rs. 400

Rs. 400

Rs. 400

Rs. 400

Rs. 400

Repair and maintenance expenses

Rs. 800

Rs. 820

Rs. 780

Rs. 790

Rs. 800

Operating cost of machines

Rs. 30, 000

Rs. 27, 000

Rs. 33, 500

Rs. 36, 020

Rs. 36, 000

Selling and marketing expenses

Rs. 5, 750

Rs. 5, 800

Rs. 5, 800

Rs. 5, 750

Rs. 5, 800

The production capacity of the company is 2000 units. The selling price for the year 2006 was Rs. 125 per unit. Some costs change almost in direct proportion to the change in volume of production, while others do not follow any obvious pattern of change with respect to the volume of production and hence are considered fixed. Using the information provided for the year 2006 asthe basis for projecting the figures for the year 2007, answer the following questions:

  1. What is the approximate cost per unit in rupees, ifthe company produces and sells 1400 units in the year 2007?

    1. Cost 104

    2. Cost 107

    3. Cost 110

    4. Cost 115

    5. Cost 116

  2. What is the minimum number of units that the company needs to produce and sell to avoid any loss?

    1. Units 313

    2. Units 350

    3. Units 384

    4. Units 747

    5. Units 928

  3. Given that the company cannot sell more than 1700 units, and it will have to reduce the price by Rs. 5 for all units, if it wants to sell more than 1400 units, what is the maximum profit, in rupees, that the company can earn?

    1. 25, 400

    2. 24, 400

    3. 31, 400

    4. 32, 900

    5. 32, 000

  4. If the company reduces the price by 5%, it can produce and sell as many units as it desires. How many units the company should produce to maximize its profit?

    1. Units 1400

    2. Units 1600

    3. Units 1800

    4. Units 1900

    5. Units 2000