This quiz works best with JavaScript enabled. Home > Accounting > Cost Accounting > Cost Volume Profit Analysis > Cost Volume Profit Analysis – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Cost Volume Profit Analysis Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Cost-volume-profit analysis assumes all of the following except: A) Total fixed costs remain the same over the relevant range. B) Total variable costs remain the same over the relevant range. C) All costs are variable or fixed. D) Units manufactured equal units sold. Show Answer Correct Answer: B) Total variable costs remain the same over the relevant range. 2. Perla Company has a projected cost of goods sold of P 4, 000, 000 including fixed cost of P 800, 000. Variable costs are expected to be 75% of net sales. What will be the projected net sales? A) P 4, 266, 667. B) P 4, 800, 000. C) P 5, 333, 333. D) P 6, 400, 000. Show Answer Correct Answer: A) P 4, 266, 667. 3. Costs that are unavoidable in outsourcing decisions are A) If the outsourcing decision is accepted. B) Expenses regardless of the decision regarding the outsourcing of the product. C) Outsourcing decision not to produce components. D) The decision to outsource manufacture of components. Show Answer Correct Answer: B) Expenses regardless of the decision regarding the outsourcing of the product. 4. CVP Analysis is most important for the determination of the A) Volume of operations necessary to break-even. B) Relationship between revenue and costs at various level of operation. C) Variable revenue necessary to equal fixed costs. D) Sales revenue necessary to equal variable costs. Show Answer Correct Answer: B) Relationship between revenue and costs at various level of operation. 5. The amount by which a company's sales can decline before losses are incurred is called the A) Contribution margin ratio. B) Degree of operating leverage. C) Margin of safety. D) Profit margin. Show Answer Correct Answer: C) Margin of safety. 6. At break even point of 400 units sold, the variable cost were P 400 and the fixed costs were P 200. What will be the 401st unit sold contribute to profit before income taxes? A) P 0. B) P 0.50. C) P 1.00. D) P 1.50. Show Answer Correct Answer: B) P 0.50. 7. Which of the following would not affect the break-even point? A) Variable expense per unit. B) Number of units sold. C) Total fixed expense. D) Selling price per unit. Show Answer Correct Answer: B) Number of units sold. 8. In break even chart, whom cost and profit line intersects with the sales line it reveals A) Break-even point. B) Point of profit. C) Point of desired sales. D) Point of total sale. Show Answer Correct Answer: A) Break-even point. 9. Break even analysis assumes over the relevant range that A) Total fixed cost are unchanged. B) Selling prices are unchanged. C) Variable cost are nonlinear. D) Fixed cost are nonlinear. Show Answer Correct Answer: B) Selling prices are unchanged. 10. Which of the following is not involved in CVP analysis? A) Unit selling price. B) Volume or level of activity. C) Fixed cost per unit. D) Variable cost per unit. Show Answer Correct Answer: C) Fixed cost per unit. 11. A company's breakeven point is 6, 000 units per annum. The selling price is $ 90 per unit and thevariable cost is $ 40 per unit.What are the company's annual fixed costs? A) $ 120. B) $ 240, 000. C) $ 300, 000. D) $ 540, 000. Show Answer Correct Answer: C) $ 300, 000. 12. ..... is equal to the difference between total revenue and total variable costs. A) Break-even point. B) Contribution margin. C) Margin of safety. D) Net operating income. Show Answer Correct Answer: B) Contribution margin. 13. If margin of safety is 25% of sales, BEP will be ..... % of sales A) 50. B) 75. C) 25. D) 60. Show Answer Correct Answer: B) 75. 14. Sales price is RM20 per unit and Variable cost is RM10 per unit. What is contribution margin per unit? A) RM5. B) RM10. C) RM30. D) RM200. Show Answer Correct Answer: B) RM10. 15. The break even data function can be used to help with a variety of decision-making situations, such as A) Identify the number of products. B) Determine the product type. C) Managing resources. D) Planning product displays. Show Answer Correct Answer: A) Identify the number of products. 16. The selling price per unit less the variable cost per unit is the A) Fixed cost per unit. B) Gross margin. C) Margin of safety. D) Contribution margin per unit. Show Answer Correct Answer: D) Contribution margin per unit. 17. The mathematical equation for computing required sales to obtain target net income is Required sales = A) Variable costs + Target net income. B) Variable costs + Fixed costs+ Target net income. C) Fixed costs + Target net income. D) No correct answer is given. Show Answer Correct Answer: B) Variable costs + Fixed costs+ Target net income. 18. The contribution margin ratio always increase when the A) Break-even point increases. B) Break-even point decreases. C) Variable cost as a percentage of net sales decrease. D) Variable cost as a percentage of net sales increase. Show Answer Correct Answer: C) Variable cost as a percentage of net sales decrease. 19. When volume equal zero units A) Fixed cost equal zero. B) Total cost equal zero. C) Net income equal zero. D) Variable cost equal zero. Show Answer Correct Answer: D) Variable cost equal zero. 20. The purpose of CVP analysis is to estimate how profits are affected by the following factors EXCEPT: A) Selling price. B) Sales volume. C) Supplier discount. D) Total cost. Show Answer Correct Answer: C) Supplier discount. ← PreviousNext →Related QuizzesCost Accounting QuizzesAccounting QuizzesCost Volume Profit Analysis Quiz 1Cost Volume Profit Analysis Quiz 2Cost Volume Profit Analysis Quiz 4 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books