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The BIG and Colourful Company
You are running “BIG and Colourful (BnC)” company that sells book to customers through three retail formats:
a. You can buy books from bookstores,
b. You can buy books from supermarket,
c. You can order books over the Internet (Online)
Your manager has an interesting way of classifying expenses: some of the expenses are classified in terms of size: Big, Small and Medium; and others are classified in terms of the colors, Red, Yellow, Green and Violet. The company has a history of categorizing overall costs into initial costs and additional costs. Additional costs are equal to the sum of Big, Small and Medium expenses There are two types of margin, contribution(sales minis initial costs) and profit (contribution minus additional costs). Given below is the data about sales and costs of BnC:
Each of the Big, Small and Medium cost is categorized by themanager into Red, Yellow, Green and Violet costs. Breakdown ofthe additional costs under these headings is shown in the tablebelow:
Red, Yellow, Green and Violet costs are allocated to different retailformats. These costs are apportioned in the ratio of number ofunits consumed by each retail format. The number of unitsconsumed by each retail format is given in the table below:
Read the following Statement
SECTION - B DECISION MAKING
Direction (Qs. 31 to 34): Read the following caselet and choose the best alternative. The BIG and Colourful Company
You are running “BIG and Colourful (BnC)” company that sells book to customers through three retail formats:
a. You can buy books from bookstores,
b. You can buy books from supermarket,
c. You can order books over the Internet (Online)
Your manager has an interesting way of classifying expenses: some of the expenses are classified in terms of size: Big, Small and Medium; and others are classified in terms of the colors, Red, Yellow, Green and Violet. The company has a history of categorizing overall costs into initial costs and additional costs. Additional costs are equal to the sum of Big, Small and Medium expenses There are two types of margin, contribution(sales minis initial costs) and profit (contribution minus additional costs). Given below is the data about sales and costs of BnC:
Sales | 60000 | |
Initial Costs | 39000 | |
Contribution | 21000 | |
(Sales - Initial Costs) | ||
Additional Costs | ||
Big | 9300 | |
Small | 3000 | |
Medium | 3500 | |
15800 | ||
Profit (Contribution –Additional Cost) | 5200 |
Expenses | Total | Red | Yellow | Green | Violet |
Big | 9300 | 5100 | 1200 | 1400 | 1600 |
Small | 3000 | 400 | 2000 | 600 | |
Medium | 3500 | 400 | 1500 | 1400 | 200 |
Total | 15800 | 5500 | 3100 | 4800 | 2400 |
Retail Format | Red | Yellow | Green | Violet |
Online | 200 | 50 | 50 | 50 |
Supermarket | 65 | 20 | 21 | 21 |
Book Store | 10 | 30 | 9 | 9 |
Total | 275 | 100 | 80 | 80 |
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Question : 31
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