This quiz works best with JavaScript enabled. Home > Finance > 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 (30 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 net profit ratio. B) Fixed cost divide by contribution margin per unit. C) Fixed cost divide by contribution margin ratio. D) Fixed cost divide by net profit per unit. Show Answer Correct Answer: C) 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) Graphical method. B) Net profit method. C) Contribution margin method. D) Mathematical equation. Show Answer Correct Answer: B) 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 200, 000. B) P 300, 000. C) P 160, 000. D) P 100, 000. Show Answer Correct Answer: D) 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 472, 500. B) P 700, 000. C) P 525, 000. D) P 420, 000. Show Answer Correct Answer: B) P 700, 000. 8. The contribution margin increase when sales volume remain the same and A) Variable cost per unit increase. B) Fixed cost increase. C) Variable cost per unit decrease. D) Fixed cost decrease. Show Answer Correct Answer: C) Variable cost per unit decrease. 9. One of the limitation of CVP Analysis is ..... A) Revenue are linear. B) Selling price are constant. C) Fluctuation in revenue or costs. D) Cost are linear. Show Answer Correct Answer: C) 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) Profit + Variable cost-Fixed cost = Sales. B) Fixed cost + Variable cost-Profit = Sales. C) Sales-Variable cost + Fixed cost = Profit. D) Sales = Fixed cost + Variable cost. Show Answer Correct Answer: D) Sales = Fixed cost + Variable cost. 12. The contribution margin ratio can be expressed in A) Percentage of revenue that exceeds VC. B) VC is expressed as a percentage of revenue. C) The percentage of income is less than VC. D) Selling price is expressed as a percentage of revenue. Show Answer Correct Answer: A) 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) Fuel costs for couriers. B) Equipment costs. C) Fare fee. D) Operating costs. Show Answer Correct Answer: A) 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 sales compared with sales required to break-even. B) Actual verses budgeted net profit margin. C) Actual verses budgeted sales. D) Actual contribution margin achieved compared with that required to break-even. Show Answer Correct Answer: A) Actual sales compared with sales required to break-even. 18. Break even point is a stage of ..... A) No profit no loss. B) Maximum loss. C) Minimum Loss. D) Maximum Profit. Show Answer Correct Answer: A) No profit no loss. 19. 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. 20. A company makes a single product which it sells for $ 2 per unit.Fixed costs are $ 13, 000 per month.The contribution/sales ratio is 40%. Sales revenue is $ 62, 500.What is the margin of safety in units? A) 14000. B) 1000. C) 15000. D) 10000. Show Answer Correct Answer: C) 15000. 21. Margin of safety is computed as: A) Actual sales-Break-even sales. B) Actual sales-Contribution margin. C) Break-even sales-Variable costs. D) Contribution margin-Fixed costs. Show Answer Correct Answer: A) Actual sales-Break-even sales. 22. A benefit sacrificed by taking one course of action instead of the most profitable alternative course of action is known as which of the following? A) Incremental cost. B) Opportunity cost. C) Relevant cost. D) Sunk cost. Show Answer Correct Answer: B) Opportunity cost. 23. Which formula is TRUE about break even point in unit? A) (Fixed cost + Profit)/CM ratio. B) Profit = Sales + VC + FC. C) Sales = VC + FC + Profit. D) Profit = Sales + VC + FC. Show Answer Correct Answer: C) Sales = VC + FC + Profit. 24. Contribution margin equals A) Revenue minus fixed cost. B) Revenue minus period cost. C) Revenue minus product cost. D) Revenue minus variable cost. Show Answer Correct Answer: D) Revenue minus variable cost. 25. If contribution margin is not sufficient to cover fixed expenses: A) Total profit equals total expense. B) Variable expenses equal contribution margin. C) Contribution margin is negative. D) A loss occurs. Show Answer Correct Answer: D) A loss occurs. 26. CVP analysis does not assume that A) Selling prices remain constant. B) There is a single revenue and cost driver. C) Total fixed costs vary inversely with the output level. D) Total costs are linear within the relevant range. Show Answer Correct Answer: C) Total fixed costs vary inversely with the output level. 27. Which is the meaning of fixed costs, below is A) Costs that change in proportion to business activity. B) The fee remains the same in total regardless of level. C) Costs that contain fixed costs and variable costs. D) Ongoing costs in business operations. Show Answer Correct Answer: B) The fee remains the same in total regardless of level. 28. Contribution margin goes toward A) Fixed and variable costs. B) Variable costs. C) Only profit. D) Fixed cost and profit. Show Answer Correct Answer: D) Fixed cost and profit. 29. Clariton Company is planning to sell 100, 000 units of Product Q for RM12 per unit. The fixed cost are RM280, 000. In order to realize a profit of RM200, 000, what would be the variable costs? A) RM 720, 000. B) RM 920, 000. C) RM 480, 000. D) RM 900, 000. Show Answer Correct Answer: A) RM 720, 000. 30. The Tulip Company is planning to sell 200, 000 units of Product . The fixed costs are RM400, 000 and variable costs are 60% of selling price. In order to realize a profit of RM100, 000, the selling price per unit would have to be A) RM6.25. B) RM5.00. C) RM4.17. D) RM3.75. Show Answer Correct Answer: A) RM6.25. Next →Related QuizzesCost Accounting QuizzesAccounting QuizzesCost Volume Profit Analysis Quiz 2Cost Volume Profit Analysis Quiz 3 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books