This quiz works best with JavaScript enabled. Home > Accounting > Cost Accounting > Cost Volume Profit Analysis > Cost Volume Profit Analysis – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Cost Volume Profit Analysis Quiz 1 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If unit output exceed the breakeven point A) There is a loss. B) Total sales revenue exceed total cost. C) There is a profit. D) Both b and c. Show Answer Correct Answer: D) Both b and c. 2. The correct formula of BEP in Ringgit Malaysia by using contribution margin method is: A) Fixed cost divide by contribution margin per unit. B) Fixed cost divide by contribution margin ratio. C) Fixed cost divide by net profit per unit. D) Fixed cost divide by net profit ratio. Show Answer Correct Answer: B) Fixed cost divide by contribution margin ratio. 3. Which statement NOT TRUE about break even point? A) Volume of activity where the organization's revenue and expenses are equal. B) Level of sales is no profit or loss. C) One of application of CVP analysis. D) State the amount sales can drop before losses begin. Show Answer Correct Answer: D) State the amount sales can drop before losses begin. 4. Below are the method for computing a break even point EXCEPT; A) Mathematical equation. B) Contribution margin method. C) Graphical method. D) Net profit method. Show Answer Correct Answer: D) Net profit method. 5. Break-even point is A) Total cost divided by variable cost per unit. B) Contribution margin per unit divided by revenue per unit. C) Fixed cost divided by contribution margin per unit. D) The sum of fixed and variable costs divided by contribution margin per unit. Show Answer Correct Answer: C) Fixed cost divided by contribution margin per unit. 6. Gerber Company is planning to sell 200, 000 units of product O for P 2 a unit. The contribution margin is 25%. Gerber will break even at this level of sales. What would be the fixed costs? A) P 100, 000. B) P 160, 000. C) P 200, 000. D) P 300, 000. Show Answer Correct Answer: A) P 100, 000. 7. Singer Inc. sells product E for P 5 per unit. The fixed costs are P 210, 000 and the variable costs are 60% of the selling price. What would be the amount of sales if Singer is to realize a profit of 10% of sales? A) P 700, 000. B) P 525, 000. C) P 472, 500. D) P 420, 000. Show Answer Correct Answer: A) P 700, 000. 8. The contribution margin increase when sales volume remain the same and A) Variable cost per unit decrease. B) Variable cost per unit increase. C) Fixed cost decrease. D) Fixed cost increase. Show Answer Correct Answer: A) Variable cost per unit decrease. 9. One of the limitation of CVP Analysis is ..... A) Fluctuation in revenue or costs. B) Cost are linear. C) Selling price are constant. D) Revenue are linear. Show Answer Correct Answer: A) Fluctuation in revenue or costs. 10. One of the example of assumptions of CVP Analysis is: A) Difficult to distinguish costs exactly into variable or fixed. B) The efficiency and productivity are to be unchanged. C) Fluctuation in revenues or cost. D) Selling price may be reduced to achieve greater volume of sales. Show Answer Correct Answer: B) The efficiency and productivity are to be unchanged. 11. In order to calculate Break-even point and Cost Volume Profit analysis, what equation can be used? A) Sales = Fixed cost + Variable cost. B) Profit + Variable cost-Fixed cost = Sales. C) Sales-Variable cost + Fixed cost = Profit. D) Fixed cost + Variable cost-Profit = Sales. Show Answer Correct Answer: A) Sales = Fixed cost + Variable cost. 12. The contribution margin ratio can be expressed in A) The percentage of income is less than VC. B) Selling price is expressed as a percentage of revenue. C) Percentage of revenue that exceeds VC. D) VC is expressed as a percentage of revenue. Show Answer Correct Answer: C) Percentage of revenue that exceeds VC. 13. The alternative that would decrease the contribution margin per unit, the most is a A) Decrease in selling price. B) Increase in selling price. C) Decrease in variable cost and expense. D) Decrease in fixed expenses. Show Answer Correct Answer: A) Decrease in selling price. 14. Which of the following is not equal to income? A) Sales less cost and expenses. B) M/S ratio time marginal income. C) Variable cost and expenses time M/S ratio. D) Marginal income less fixed cost and expenses. Show Answer Correct Answer: C) Variable cost and expenses time M/S ratio. 15. Variable costs change in total as activity levels change. which one is an example A) Fare fee. B) Operating costs. C) Fuel costs for couriers. D) Equipment costs. Show Answer Correct Answer: C) Fuel costs for couriers. 16. A profit-volume chart can illustrate the relationship between A) Sales revenue and costs. B) Sales volume and costs. C) Sales volume, revenue and costs. D) Sales volume and profit. Show Answer Correct Answer: D) Sales volume and profit. 17. Which of the following describes the margin of safety? A) Actual contribution margin achieved compared with that required to break-even. B) Actual sales compared with sales required to break-even. C) Actual verses budgeted net profit margin. D) Actual verses budgeted sales. Show Answer Correct Answer: B) Actual sales compared with sales required to break-even. 18. Gross margin is A) Sales revenue less variable costs. B) Sales revenue less cost of goods sold. C) Contribution margin less fixed costs. D) Contribution margin less variable cost. Show Answer Correct Answer: B) Sales revenue less cost of goods sold. 19. Break even point is a stage of ..... A) Maximum Profit. B) Maximum loss. C) Minimum Loss. D) No profit no loss. Show Answer Correct Answer: D) No profit no loss. 20. In analyzing the decision to make / buy and special orders need to use A) CVP analysis. B) Determine the product type. C) The entity uses the relevant income/cost. D) Allocating resources. Show Answer Correct Answer: C) The entity uses the relevant income/cost. Next →Related QuizzesCost Accounting QuizzesAccounting QuizzesCost Volume Profit Analysis Quiz 2Cost Volume Profit Analysis Quiz 3Cost Volume Profit Analysis Quiz 4 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books