4

# Manufacturing cost in a chemical company does not include the

Fixed charges

Direct products cost

4

# Which of the following is not a component of the fixed capital for a chemical plant facility?

Raw materials inventory

Utilities plants

Process equipment

Emergency facilities

4

# Operating profit of a chemical plant is equal to

Profit before interest and tax i.e., net profit + interest + tax

Profit after tax plus depreciation

Net profit + tax

Profit after tax

4

300

600

800

1000

4

# Break-even point is the point of intersection of

Fixed cost and total cost

Total cost and sales revenue

Fixed cost and sales revenue

None of these

4

# Pick out the correct statement.

Difference between income and expense is termed as gross revenue

Unamortised cost is the difference between the original cost of a property and all the depreciation charges made to date

Sum-of-the-years-digits methods of depreciation calculation accounts for the interest on the investment

Scrap value is the net amount of money obtainable from the sale of used property over and above any charges involved in its removal & sale

4

Fixed

Utilities

Capital

4

# Pick out the wrong statement.

Gross margin = net income - net expenditure

Net sales realisation (NSR) = Gross sales - selling expenses

At breakeven point, NSR is more than the total production cost

Net profit = Gross margin - depreciation - interest

4

Low alloy steel

Titanium

High alloy steel

4

# __________ of depreciation calculation accounts for the interest on investment.

Straight line method

Declining balance

Both (A) and (B)

Neither (A) nor (B)

4

# For a typical project, the cumulative cash flow is zero at the

End of the project life

Breakeven point

Start up

End of the design stage

4

0.1

0.6

0.2

0.8

4

# Cost incurred towards __________ in a chemical plant is a component of the utilities cost.

Water supply

Running a control laboratory

Property protection

Medical services

4

# Pick out the wrong statement.

Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity)

Return on equity = profit after tax/net worth

Working capital turnover ratio = sales/net working capital

Total cost of production is more than net sales realisation (NSR) at breakeven point

4

# Utilities cost in the operation of chemical process plant comes under the

Fixed charges

Direct production cost

General expenses

4

# In a manufacturing industry, breakeven point occurs, when the

Total annual rate of production equals the assigned value

Total annual product cost equals the total annual sales

Annual profit equals the expected value

Annual sales equals the fixed cost

4

10

20

> 20

< 20

4

0.1 to 1

1 to 2

10 to 20

50 to 60

4

# Depreciation

Costs (on annual basis) are constant when the straight line method is used for its determination

Is the unavoidable loss in the value of the plant, equipment and materials with lapse in time

Does figure in the calculation of income tax liability on cash flows from an investment

All (A), (B) and (C)

4

# Out of the following, the depreciation calculated by the __________ method is the maximum.

Diminishing balance

Straight line

Sum of the years digit

Sinking fund

4

1

5

10

30

4

# Which of the following relationship is not correct is case of a chemical process plant?

Manufacturing cost = direct product cost + fixed charges + plant overhead costs

General expenses = administrative expenses + distribution & marketing expenses

Total product cost = manufacturing cost + general expenses

Total product cost = direct production cost + plant overhead cost

4

# Which of the following is a component of working capital investment?

Utilities plants

Maintenance and repair inventory

Process equipments

Depreciation

4

# The economic life of a large chemical process plant as compared to a small chemical plant is

Only slightly more

Much more

Slightly less

Almost equal

4

121

110

97

91

4

# Functional depreciation of an equipment is the measure of decrease in its value due to its

Ageing

Wear and tear

Obsolescence

Breakdown or accident

4

# Optimum number of effects in a multiple effect evaporator is decided by the

Cost benefit analysis

Floor area availability

Terminal parameters

Evaporation capacity required

4

# Personnel working in the market research group is responsible for the job of

Equipment selection

Product evaluation

Equipment design

Cost estimation

4

# Pick out the wrong statement.

Gross revenue is that total amount of capital received as a result of the sale of goods or service

Net revenue is the total profit remaining after deducting all costs excluding taxes

The ratio of immediately available cash to the total current liabilities is known as the cash ratio

Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval

4

p[(1+i)n - 1)]

p(1 + i)n

p(1 - i)n

p(1 + in)