Unit: Business Arithmetic

Previous Years Questions (PYQs)

Q. No. Short Answer Type Questions [2 Marks] Exam
1. ‘Ayush Generic Medicines’, a chemist shop sells generic medicines as per the details given below were sold CBSE
No. of Customers Per Customer Billed (₹) 2017
15 370
20 430
45 500
25 1,000
95 1,200
Calculate the average amount of medicines sold per customer.
2. Number of people who took their meals and the total billing for each of the 5 weeks is in the following table.
What are the 'unit of sale' and the 'unit price' in this case? If the variable cost is 50% of the sale price,
calculate the 'unit cost' and the 'gross margin' per unit of sale.
Weeks Number of People Total Billed Amount (₹) Average Billed Amount
taking meals (₹)
Week 1 120 18,000 150
Week 2 60 12,300 205
Week 3 70 10,220 146
Week 4 80 17,680 221
Week 5 90 21,600 240
Total 420 79,800
3. The fixed expenses of 'Wick and Wack' Limited is ₹ 2,75,000. The selling price of the toy 'Wick and Wack' is ₹
50 and the variable cost is ₹ 30 per unit. Find the break-even quantity and sales at break-even level.
4. A company uses 300 units of an item per day and the order lead time in 5 days. What should be the level of
inventory when a new order is being placed?
5. A book shop sells pens 30,000 quantity per year. Demand is uniform. Purchase cost is ₹ 6 per pen. Holding CBSE
cost per annum is 20% of purchase cost. Ordering cost is ₹ 500 per order. What should be the EOQ for the TBQ
shopkeeper?
6. Pankaj an entrepreneur started a new website 'SAVO ELECTRICITY' to sell LED bulbs. In the first year he sold CBSE
2,400 bulbs at the rate of ₹ 100 each. His cost of placing an order and receiving the bulbs is ₹ 500 per order. TBQ
If the economic order quantity is 200 bulbs, find out the inventory holding cost per year.
7. The annual quantity of Jackets sold by Meghana Wool Mart is 12,000 at the rate of ₹ 1,000/ per jacket. The CBSE
cost of placing an order and receiving goods is ₹ 500/ per order. Inventory holding cost is ₹ 300/per annum. SQP
What is the economic order quantity for Meghana Wool Mart? Term II

Q. No. Short Answer Type Questions [3 Marks] Exam

1. Following information is related to sales mix of pen, Sketch Pen and Geometry Box. CBSE
Product Pen Sketch Pen Geometry Box 2016
Sales Price per Unit (in ₹) 40 45 75
Variable Cost per Unit (in ₹) 22 30 40
Sales Mix-Percentage 20% 20% 60%
2. Calculate working capital of Raja and Co who has the following items in its balance sheet. CBSE
Stock ₹ 50,000; trade creditors ₹ 32,000; debtors ₹ 75,000; cash ₹ 1,00,000; dividend payable ₹ 50,000; tax ₹ TBQ
44,000; short-term loan ₹ 61,000; short-term investments ₹ 76,000. Calculate gross and net working capital.
3. Current assets of a firm are cash = ₹ 50,000, debtors = ₹ 75,000, inventory = ₹ 1,00,500. Its current liabilities
are bills payable = ₹ 35,000, Creditors = ₹ 80,000.
On the basis of the given information, compute gross working capital and net working capital.
4. Calculate the operating cycle of Vijay Enterprises, if working capital requirement per week is ₹ 12,000 and Delhi
production cycle is one week. 2014
Number of soaps to be produced per week = 200 units
Labor charges per week = ₹ 2,000
Cost of raw materials per week = ₹ 4,000
 5. ‘Janta Foods Ltd.’ Is a restaurant situated on a national highway near Hyderabad. The following figures have CBSE
been extracted form books of Janta Foods Ltd. 2017
Particulars Amount (₹)
Stock of Raw Materials 1,50,000
Short Term Loans 1,83,000
Trade Creditors 96,000
Trade Debtors 2,25,000
Dividend Payable 1,50,000
Tax Payable 1,32,000
Short Term Investments 2,28,000
6. Find out EOQ and number of orders to be placed during the year from the following information. Annual
consumption = 120 units
Buying cost per order = ₹ 20
Price per unit = ₹ 100
Storage cost as percentage of inventory = 12%.
7. Paramveer Singh runs an online business for gym equipment. The annual demand for the Waist Flexors sold CBSE
by him is 16,000 units. The annual holding cost of Waist Flexors per unit is ₹ 48 and the cost of placing an 2018
order is ₹1,500. Calculate the Economic Order Quantity of Waist Flexors.
8. Aditya Bearings Ltd. are the manufacturers and suppliers of ball bearings to fan manufacturing companies. CBSE
The company requires 900 kg of wrought iron for its production process. The cost of placing each order is ₹ 2019
50 and carrying cost is ₹ 100. Calculate Economic Order Quantity.
9. The shop', a readymade garments retail shop, sold 5,000 shirts at ₹ 200 per shirt during the year ended 31st CBSE
March, 2014. Cost of placing an order and receiving goods is ₹ 1,000 per order. Inventory holding cost is ₹ 2015
250 per year. Calculate the Economic order quantity' for 'the shop'.
10. Meow Milk Center' sells 3,000 bottles of flavored milk per year. Cost of one milk bottle is 60. Holding cost CBSE
per annum is ₹ 12. Ordering cost is ₹ 500 per order. Calculate the 'Economic order quantity'. 2020
11. From the following information, calculate the return on investment.
Net profit (After tax) ratio 12%, Tax rate 50%
Revenue from Operations - ₹ 10,00,000
15% Long-term Borrowings - ₹ 4,00,000
Equity share Capital - ₹ 1,50,000
Reserves and Surplus - ₹ 1,50,000
20% Preference Share Capital - ₹ 50,000
12. Calculate the Return on Equity (ROE) for Malti International Limited manufacturing pre mix for instant CBSE
shakes and smoothies from the details given below SQP
Investment ₹ 10,00,000 Term II
Borrowed funds ₹ 6,00,000
Interest rate per annum is 10%.
Monthly sales revenue is ₹ 6,00,000 and cost of goods sold is ₹ 3,00,000.
Fixed expenses per month ₹ 2,00,000 (salary ₹ 1,50,000, rent and utility ₹ 50,000)
Depreciation ₹ 10,000
Tax @ 20%.
If Malti International Limited wishes to know how their own money is being used, which parameter for
performance evaluation, ROE or ROI, should be used?
13. Harsha started her herbal beauty products shop in Chandigarh with a capital of ₹ 9,00,000. She took a loan CBSE
of ₹ 5,00,000 from the State Bank of India at 9% per annum interest. During the year ended 31st March, 2017
2016 her sales were ₹ 20,90,000 and the cost of goods sold was ₹ 15,30,000. She paid monthly rent of the
shop ₹ 11,000 and monthly salary of ₹ 25,000 to the employees. The Tax Rate is 30%.
Calculate the return on equity.

Q. No. Long Answer Type Questions [5 Marks] Exam

1. A factory is engaged in manufacturing washing machines. The following information is available to you CBSE
Sales = ₹ 4,00,000 2014 C
Direct material cost (2,000 units) = ₹ 1,00,000
Direct labor cost (2,000 units) = ₹ 40,000
Direct expenses (2,000 units) = ₹ 20,000
 Fixed cost = ₹ 1,20,000
Find out
(i) Variable cost per unit
(ii) Total cost
(iii) Quantity to be sold at break-even point
2. A factory is engaged in manufacturing coolers. The following information is available to you. CBSE
Sales = ₹ 2,50,000 2013
Direct labor cost (for 100 units) = ₹ 25,000
Direct material cost (for 100 units) = ₹ 62,500
Direct expenses (for 100 units) = ₹ 12,500
Fixed cost = ₹ 75,000
Calculates
(i) Variable cost per unit (ii) Total cost
(iii) Break-even point Are actual sales exceeding the sales required too break-even?
3. Bright Lights Pvt. Ltd. started a business of making three varieties of bulbs. From the following information, CBSE
calculate break-even for the three varieties of bulbs for the company in units 2020
Particulars LED Bulb Zero Watt LED Bulb 10 Watts LED Bulb 20 Watts
Sales Price (₹) 80 45 60
Variable Costs (₹) 40 15 20
Sales Mix 50 % 20 % 30 %

Fixed costs for the production process is ₹ 76,000

4. A manufacturing plant produces four different types of machinery tools and their variable costs and price are CBSE
given below. The fixed costs are allocated - taking into consideration the utilization of common resources for TBQ
different products and they are also given separately for each product. Here, is the basic data
Products A, B, C and D
Selling Price ₹ 1,00,000; ₹ 50,000; ₹ 70,000 and ₹ 2,00,000 respectively.
Variable Cost ₹ 30,000; ₹ 25,000; ₹ 30,000 and ₹ 1,00,000 respectively.
Allocated fixed expenses per month ₹ 3,50,000; ₹ 2,50,000; ₹ 10,00,000 and ₹ 15,00,000 respectively.
Compute break even level for each ft the product.
5. Calculate Return on Investment (Rol) and Return on Equity (ROE) on the basis of given information. You have
newly started a beauty parlor business; you spend ₹ 1,50,000 to open the parlor of which you invested ₹
70,000 of your own money and borrowed a Joan for ₹ 780,000. Interest rate per annum is 7%. Sales revenue
per month is 80,000. Cost of goods sold is *30,000 per month. Fixed expenses are ₹30,000 (salary ₹ 20,000,
rent and utility ₹ 10,000), depreciation ₹ 13,000 and tax @ 14%.
6. Calculate Return on Investment (ROI) and Return on Equity (ROE). Total investment ₹ 10,00,000 out of it ₹
24,00,000 is owner's own money and he borrowed a loan for ₹6,00,000. Interest rate per annum is 10%.
Monthly sales revenue is ₹6,00,000 and cost of goods sold is ₹ 3,00,000, fixed expenses per month ₹ 2,00,000
(salary ₹ 1,50,000, rent and utility ₹50,000), depreciation ₹10,000 and tax @ 20%.

Q. No. Long Answer Type Questions [6 Marks] Exam

1. Parvesh has started a restaurant in a small town by the name of 'Spices of India' by spending ₹ 50,00,000. He CBSE
invested ₹ 10,00,000 of his own and took a loan of ₹ 40,00,000 from State Bank of India @ 6% per annum. His 2019
monthly sales revenue is ₹ 20,00,000 and monthly cost of goods sold is ₹ 10,00,000.
He pays a monthly salary of ₹ 2,00,000 to his employees. The GST rate is 18%.
Calculate: (i) Return on investment (ii) Return on equity.
2. Karan has started a restaurant on National Highway No. 1 in the name of 'Apna Dhaba' by spending CBSE
₹ 20,00,000. He invested ₹ 8,00,000 of his own and took a loan of ₹ 12,00,000 from SBI at the rate of 6% per 2015
annum. His monthly sales revenue is ₹ 12,00,000 and the cost of goods sold is ₹ 7,00,000. He pays monthly
salaries of ₹ 2,00,000 to his employees. The rate of tax is 25%. You are required to calculate the following for
Karan
(i) Return on investment (ii) Return on equity
3. A hotel had varying number of guests during five weeks. The information regarding the number of guests and CBSE
the average weekly billing is presented in the following table 2019
Week No. of Guests Average Billed (₹)
1 240 300
 2 120 410
3 140 292
4 160 442
5 180 480

(i) What is the 'Unit of sale' and 'Unit price' in this case?
(ii) If the cost of goods sold or variable cost is 60% of the sales price, calculate the 'Unit cost' and the 'Gross
profit'.
4. Calculate break-even point for a textile shop on the basis of the given information. Garments sold are silk
sarees, cotton sarees, suit materials, kids wear.
Selling prices (in ₹)
Silk sarees = ₹ 3,500/ saree, Cotton sarees = ₹ 900/ saree, Suit materials = ₹ 1,800/ suit, Kids wear = ₹ 450/wear
Variable cost Silk
sarees = 1,050 pieces, Cotton sarees = 270 pieces, Suit materials = 540 pieces, Kids wear = 135 pieces
Allocated fixed expenses
Silk sarees = 2,45,000, Cotton sarees = 1,57,500, Suit material = 63,000, Kids wear = 70,875
5. Good Wash Limited' are the manufacturers of different sizes of fully automatic washing machines marked as CBSE
'small', 'medium', ' large' and 'industrial'. From the information given below, calculate the 'break-even 2015
quantity' of the machines manufactured per month.
Machine Unit Selling Price (₹) Unit Variable Price (₹) Fixed Expenditure per Month (₹)
Small 10,000 3,000 35,000
Medium 15,000 8,000 35,000
Large 20,000 13,000 70,000
Industrial 35,000 20,000 1,50,000
6. Raman is a potential investor who wishes to be a part of Equity Linked Saving Scheme (ELSS). He has given the CBSE
particulars of two companies to seek your advice for investment. Compare the return on equity of the two 2018
companies and suggest to Raman where he should invest.
Particulars Alpha Ltd. (₹) Beta Ltd. (₹)
Total Capital Invested 20,00,000 20,00,000
Owned Funds 10,00,000 10,00,000
Interest on Borrowings from Bank 60,000 50,000
Cost of Goods Slod per Month 7,00,000 8,50,000
Monthly Sales Revenue 10,00,000 15,00,000
Salaries 2,40,000 3,60,000
Utilities 75,000 1,00,000
Depreciation 5,500 6,000
Tax Rate 20% 25%