This quiz works best with JavaScript enabled. Home > Finance > Accounting > Cost Accounting > Cost Volume Profit Analysis > Cost Volume Profit Analysis – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Cost Volume Profit Analysis Quiz 2 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Each of the following would affect the break-even point except a change in the A) Number of units sold. B) Sales price per unit. C) Total fixed cost. D) Variable cost per unit. Show Answer Correct Answer: A) Number of units sold. 2. If Pantas Railway's fixed costs total RM90, 000 per month, the variable cost per passenger is RM 45, and tickets sell for RM75, how much revenue must the Railway generate to earn RM120, 000 in operating income per month? A) RM525, 000. B) RM210, 000. C) RM350, 000. D) RM7, 000. Show Answer Correct Answer: A) RM525, 000. 3. The margin of safety is the difference between A) Budgeted expenses and breakeven expenses. B) Budgeted revenue and breakeven revenue. C) Actual operating income and budgeted operating income. D) Actual contribution margin and budgeted contribution margin. Show Answer Correct Answer: B) Budgeted revenue and breakeven revenue. 4. In order to calculate Break-even point and Target profit analysis, what equation can be used? A) Profit + Variable cost-Fixed cost = Sales. B) Fixed cost + Variable cost x Profit. C) Sales = Fixed cost + Variable cost. D) Sales-Variable cost-Fixed cost = Profit. Show Answer Correct Answer: D) Sales-Variable cost-Fixed cost = Profit. 5. Which statement refer to contribution margin? A) Sales price per unit minus all fixed cost. B) Sales price per unit add all variable cost per unit. C) Sales price per unit minus all variable cost per unit. D) Sales price per unit add all fixed cost. Show Answer Correct Answer: C) Sales price per unit minus all variable cost per unit. 6. Break-even Point can be calculated using these method except: A) Contribution Margin approach. B) Mathematical Equation method. C) Regression method. D) Graph method. Show Answer Correct Answer: C) Regression method. 7. Assume only the specified parameters change in a CVP analysis. The contribution margin percentage increases when: A) Variable costs per unit decrease. B) Variable costs per unit increase. C) Total fixed costs decrease. D) Total fixed costs increase. Show Answer Correct Answer: A) Variable costs per unit decrease. 8. If fixed cost decrease while variable cost per unit and selling price per unit remain constant, the new contribution margin in relation to old contribution margin will be A) Unchanged. B) Higher. C) Lower. D) None of these. Show Answer Correct Answer: A) Unchanged. 9. A company produces and sells a single product. Budgeted sales are $ 2.4 million, budgeted fixed costs are $ 360, 000 and the margin of safety is $ 400, 000. What are budgeted variable costs? A) $ 1.640 million. B) $ 2.040 million. C) $ 1.968 million. D) $ 1.728 million. Show Answer Correct Answer: C) $ 1.968 million. 10. 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. 11. 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, 800, 000. B) P 5, 333, 333. C) P 6, 400, 000. D) P 4, 266, 667. Show Answer Correct Answer: D) P 4, 266, 667. 12. Costs that are unavoidable in outsourcing decisions are A) If the outsourcing decision is accepted. B) The decision to outsource manufacture of components. C) Expenses regardless of the decision regarding the outsourcing of the product. D) Outsourcing decision not to produce components. Show Answer Correct Answer: C) Expenses regardless of the decision regarding the outsourcing of the product. 13. 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. 14. The amount by which a company's sales can decline before losses are incurred is called the A) Margin of safety. B) Contribution margin ratio. C) Degree of operating leverage. D) Profit margin. Show Answer Correct Answer: A) Margin of safety. 15. 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 1.00. B) P 0.50. C) P 0. D) P 1.50. Show Answer Correct Answer: B) P 0.50. 16. Which of the following would not affect the break-even point? A) Selling price per unit. B) Total fixed expense. C) Number of units sold. D) Variable expense per unit. Show Answer Correct Answer: C) Number of units sold. 17. In break even chart, whom cost and profit line intersects with the sales line it reveals A) Point of desired sales. B) Break-even point. C) Point of total sale. D) Point of profit. Show Answer Correct Answer: B) Break-even point. 18. Break even analysis assumes over the relevant range that A) Variable cost are nonlinear. B) Fixed cost are nonlinear. C) Total fixed cost are unchanged. D) Selling prices are unchanged. Show Answer Correct Answer: D) Selling prices are unchanged. 19. Which of the following is not involved in CVP analysis? A) Volume or level of activity. B) Variable cost per unit. C) Fixed cost per unit. D) Unit selling price. Show Answer Correct Answer: C) Fixed cost per unit. 20. 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) $ 300, 000. B) $ 540, 000. C) $ 120. D) $ 240, 000. Show Answer Correct Answer: A) $ 300, 000. 21. ..... is equal to the difference between total revenue and total variable costs. A) Contribution margin. B) Net operating income. C) Break-even point. D) Margin of safety. Show Answer Correct Answer: A) Contribution margin. 22. 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. 23. Sales price is RM20 per unit and Variable cost is RM10 per unit. What is contribution margin per unit? A) RM30. B) RM200. C) RM5. D) RM10. Show Answer Correct Answer: D) RM10. 24. 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) Managing resources. C) Determine the product type. D) Planning product displays. Show Answer Correct Answer: A) Identify the number of products. 25. The selling price per unit less the variable cost per unit is the A) Margin of safety. B) Fixed cost per unit. C) Gross margin. D) Contribution margin per unit. Show Answer Correct Answer: D) Contribution margin per unit. 26. The mathematical equation for computing required sales to obtain target net income is Required sales = A) Fixed costs + Target net income. B) Variable costs + Target net income. C) No correct answer is given. D) Variable costs + Fixed costs+ Target net income. Show Answer Correct Answer: D) Variable costs + Fixed costs+ Target net income. 27. The contribution margin ratio always increase when the A) Variable cost as a percentage of net sales increase. B) Variable cost as a percentage of net sales decrease. C) Break-even point increases. D) Break-even point decreases. Show Answer Correct Answer: B) Variable cost as a percentage of net sales decrease. 28. When volume equal zero units A) Total cost equal zero. B) Fixed cost equal zero. C) Variable cost equal zero. D) Net income equal zero. Show Answer Correct Answer: C) Variable cost equal zero. 29. The purpose of CVP analysis is to estimate how profits are affected by the following factors EXCEPT: A) Sales volume. B) Selling price. C) Total cost. D) Supplier discount. Show Answer Correct Answer: D) Supplier discount. 30. In Cost Volume Profit analysis graph, the intersect line between total costs and total sales will be a ..... A) Break-even point. B) Point of profit. C) Point of desired sales. D) Point of total sales. Show Answer Correct Answer: A) Break-even point. ← PreviousNext →Related QuizzesCost Accounting QuizzesAccounting QuizzesCost Volume Profit Analysis Quiz 1Cost Volume Profit Analysis Quiz 3 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books