ICAR AICE-JRF/SRF Food Industry Management, Costing & Entrepreneurship: practice questions

1 · Cost of production and break-even analysis · medium

What does high operating leverage mean for a food unit?

1. The unit cannot ever reach its break-even point
2. Profit swings sharply with volume around break-even
3. Profit does not depend on sales volume at all
4. Variable costs are much higher than fixed costs

2 · Raw-material procurement and contract supply · medium

What is side-selling in contract farming?

1. Farmers selling contracted produce elsewhere
2. Processors selling surplus produce to other processors
3. Farmers selling produce at roadside stalls before harvest
4. Exporters selling the same product in several countries at once

3 · Inventory and cold-chain logistics for food · medium

Why are some fruits not stored at 0 to 2 °C like most chilled foods?

1. They suffer chilling injury at low temperatures
2. They freeze solid at 2 °C
3. They ripen faster in the cold
4. They become unsafe to eat below 5 °C

4 · Marketing and branding of processed foods · medium

Why are nutrition and health claims on food labels regulated in many jurisdictions?

1. To make all foods carry the same claims
2. To prevent foods from listing their ingredients
3. To ensure they are truthful and substantiated
4. To allow any claim that increases sales

5 · Export of processed foods · medium

Under the Incoterm FOB, when does risk pass from seller to buyer?

1. When the goods leave the seller's factory gate by lorry
2. When the goods arrive at the buyer's own warehouse
3. When the buyer pays the invoice in full to the seller
4. When goods are on board at the port of shipment

6 · Export of processed foods · medium

Which is a common reason for border rejection of spices and nuts in importing markets?

1. Salmonella or aflatoxin contamination
2. Too much vitamin C in the product
3. Packaging printed in two colours
4. Use of recycled cardboard cartons

7 · Project report and financial appraisal of a food unit · medium

When is a project acceptable by the IRR criterion?

1. When its payback is longer than its life
2. When its IRR equals zero
3. When its IRR exceeds the cost of capital
4. When its IRR is below the inflation rate

8 · Project report and financial appraisal of a food unit · medium

What is the main weakness of the payback period method?

1. It ignores discounting and later cash flows
2. It cannot be calculated for food projects at all
3. It always rejects profitable projects automatically
4. It requires knowledge of the project's IRR first

9 · Human resources and safety in food plants · medium

What five conditions make up the dust explosion pentagon?

1. Flour, sugar, starch, spices and milk powder
2. Fuel, oxygen, ignition, dispersion and confinement
3. Heat, pressure, moisture, time and light
4. Noise, vibration, dust, cold and fatigue

10 · Human resources and safety in food plants · hard

Why are leading indicators used alongside injury rates in safety management?

1. They always show higher figures than injury rates
2. They are required only by food-safety law
3. They replace the need to record any injuries
4. They show whether controls work before injuries occur