Question 1

To which function of management is CVP analysis most applicable?

Accepted Answer

A) directing 
B) controlling 
C) planning 
D) organizing 
A) directing 
B) controlling 
C) planning 
D) organizing

Question 2

The break-even point

Accepted Answer

A) is the point at which total sales equals total contribution margin. 
B) is the point at which total revenue equals total fixed costs plus total variable costs. 
C) is the point at which total sales equal total fixed costs. 
D) is the point at which total sales equal total variable costs. 
A) is the point at which total sales equals total contribution margin. 
B) is the point at which total revenue equals total fixed costs plus total variable costs. 
C) is the point at which total sales equal total fixed costs. 
D) is the point at which total sales equal total variable costs.

Question 3

Which of the following is the correct formula for the contribution margin ratio?

Accepted Answer

A) sales - total variable cost 
B) (unit selling price - unit variable cost)÷ unit selling price 
C) unit selling price - unit variable cost 
D) (unit selling price - unit variable cost)÷ unit variable cost 
A) sales - total variable cost 
B) (unit selling price - unit variable cost)÷ unit selling price 
C) unit selling price - unit variable cost 
D) (unit selling price - unit variable cost)÷ unit variable cost

Question 4

Which one of the following describes the break-even point?

Accepted Answer

A) It is the point where total sales equal total variable plus total fixed costs. 
B) It is the point where the contribution margin equals zero. 
C) It is the point where total variable costs equal total fixed costs. 
D) It is the point where total sales equal total fixed costs. 
A) It is the point where total sales equal total variable plus total fixed costs. 
B) It is the point where the contribution margin equals zero. 
C) It is the point where total variable costs equal total fixed costs. 
D) It is the point where total sales equal total fixed costs.

Question 5

Which one of the following is true concerning a CVP income statement?

Accepted Answer

A) Costs and expenses are classified only by function. 
B) It is prepared for both internal and external use. 
C) It shows contribution margin instead of gross profit. 
D) Costs and expenses are classified as product or period. 
A) Costs and expenses are classified only by function. 
B) It is prepared for both internal and external use. 
C) It shows contribution margin instead of gross profit. 
D) Costs and expenses are classified as product or period.

Question 6

Use the following information for questions 
In September, Smith Company had the following financial statement amounts related to producing 500 units:
 $\begin{array}{ll}
\text { Direct materials } & \$ 27,000 \
\text { Depreciation expense } &11,000\
\text { Sales revenue } & 95,000 \
\text { Direct labour } & 23,000 \
\text { Rent expense } & 25,000
\end{array}$
-How much is total contribution margin for September?

Accepted Answer

A) $45,000 
B) $9,000 
C) $68,000 
D) $20,000 
A) $45,000 
B) $9,000 
C) $68,000 
D) $20,000

Question 7

Use the following information for items 
Ed Green Corporation has two divisions; Outdoor Sports and Indoor Sports.The sales mix is 60% for Outdoor Sports and 40% for Indoor Sports.Green incurs $2,420,000 in fixed costs.The contribution margin ratio for the Outdoor Sports Division is 40%, while for the Indoor Sports Division it is 50%.
-What will be the total contribution margin at the break-even point?

Accepted Answer

A) $ 960,000 
B) $1,600,000 
C) $2,420,000 
D) $4,960,000 
A) $ 960,000 
B) $1,600,000 
C) $2,420,000 
D) $4,960,000

Question 8

A company sells a product which has a unit sales price of $9, unit variable cost of $6 and total fixed costs of $60,000.How many units must the company sell to break even?

Accepted Answer

A) 180,000 
B) 20,000 
C) 6,667 
D) 10,000 
A) 180,000 
B) 20,000 
C) 6,667 
D) 10,000

Question 9

If M&H Ltd.has a margin of safety of $100,000, which of the following statements is correct?

Accepted Answer

A) Sales can increase by $100,000 before M&H have an operating loss. 
B) Fixed costs can increase by $100,000 before M&H have an operating loss. 
C) Sales can decrease by $50,000 and fixed costs can increase by $40,000 before M&H have an operating loss. 
D) Sales can increase by $50,000, and fixed costs can decrease by $50,000 before M&H have an operating loss. 
A) Sales can increase by $100,000 before M&H have an operating loss. 
B) Fixed costs can increase by $100,000 before M&H have an operating loss. 
C) Sales can decrease by $50,000 and fixed costs can increase by $40,000 before M&H have an operating loss. 
D) Sales can increase by $50,000, and fixed costs can decrease by $50,000 before M&H have an operating loss.

Question 10

Sutton Company produces flash drives for computers, which it sells for $20 each.The variable cost to make each flash drive is $6.During April, 700 drives were sold.Fixed costs for April were $2 per unit for a total of $1,400 for the month.How much is the monthly break-even level of sales in dollars for Sutton Company?

Accepted Answer

A) $100 
B) $2,000 
C) $7,000 
D) $4,200 
A) $100 
B) $2,000 
C) $7,000 
D) $4,200

Question 11

Use the following information for questions 
In September, Smith Company had the following financial statement amounts related to producing 500 units:
 $\begin{array}{ll}
\text { Direct materials } & \$ 27,000 \
\text { Depreciation expense } &11,000\
\text { Sales revenue } & 95,000 \
\text { Direct labour } & 23,000 \
\text { Rent expense } & 25,000
\end{array}$
-How much is the contribution margin per unit?

Accepted Answer

A) $45,000 
B) $9,000 
C) $90 
D) $18 
A) $45,000 
B) $9,000 
C) $90 
D) $18

Question 12

Sutton Company produces flash drives for computers, which it sells for $20 each.Each flash drive costs $6 of variable costs to make.During April, 700 drives were sold.Fixed costs for April were $4 per unit for a total of $2,800 for the month.How much does Sutton's operating income increase for each $1,000 increase in revenue per month?

Accepted Answer

A) $700 
B) $500 
C) $14,000 
D) Not enough information to determine the answer. 
A) $700 
B) $500 
C) $14,000 
D) Not enough information to determine the answer.

Question 13

Sample, Inc.determined its unit variable cost increased by 15%.Which one of the following will NOT increase as a direct result?

Accepted Answer

A) total costs 
B) total variable costs 
C) contribution margin 
D) the break-even point 
A) total costs 
B) total variable costs 
C) contribution margin 
D) the break-even point

Question 14

Tykee Company has the following data: Variable costs are $75 \%$ of the unit selling price The contribution margin per unit is $400. The fixed casts are $600000. Which of the following expresses the break-even point in dollars?

Accepted Answer

A) .25 x 600,000 = X 
B) 600,000 ÷.75 = X 
C) ($600,000 ÷ $400)x.75 = X 
D) $600,000 ÷.25 = X 
A) .25 x 600,000 = X 
B) 600,000 ÷.75 = X 
C) ($600,000 ÷ $400)x.75 = X 
D) $600,000 ÷.25 = X

Question 15

Which one of the following lines is not drawn separately on a CVP graph?

Accepted Answer

A) total cost line 
B) fixed cost line 
C) sales line 
D) variable cost line 
A) total cost line 
B) fixed cost line 
C) sales line 
D) variable cost line

Question 16

Use the following information for items 
Brad Sherwood Corporation sells two types of computers; one is designed for audio applications and the other for video applications.Sherwood incurs $300,125 in fixed costs.
 $\text { Per-unit data on the two products is presented blow: }$
$\begin{array}{llcc}
  \underline{\text { Unit data } } &\underline{\text { Audio computer } }&\underline{ \text { Video computer }}\
 \text {Selling price  } &\$1,500&\$1,750\
 \text {  Variable costs  } &\underline{1,100}&\underline{1,200}\
 \text { Contribution margin }& \underline{\$400}&\underline{\$550}\
 \text { Salses mix } &75\%&25\%\

\end{array}$

-The break-even point in units is

Accepted Answer

A) 267. 
B) 632. 
C) 686. 
D) 800. 
A) 267. 
B) 632. 
C) 686. 
D) 800.

Question 17

Which one of the following is the format of a CVP income statement?

Accepted Answer

A) sales - variable costs = fixed costs + net income 
B) sales - fixed costs - variable costs - operating expenses = net income 
C) sales - cost of goods sold - operating expenses = net income 
D) sales - variable costs - fixed costs = net income 
A) sales - variable costs = fixed costs + net income 
B) sales - fixed costs - variable costs - operating expenses = net income 
C) sales - cost of goods sold - operating expenses = net income 
D) sales - variable costs - fixed costs = net income

Question 18

Old Canadian Company has sales of $500,000, variable costs of $425,000, and fixed costs of $25,000.New World Company has sales of $500,000, variable costs of $200,000, and fixed costs of $250,000.Old Canadian's contribution margin ratio is

Accepted Answer

A) 15%. 
B) 60%. 
C) 85%. 
D) 95%. 
A) 15%. 
B) 60%. 
C) 85%. 
D) 95%.

Question 19

CopperZ Company has variable costs which are 40% of its unit selling price and fixed costs of $30,000.How many sales will CopperZ report at its break-even point in dollars?

Accepted Answer

A) $50,000 
B) $75,000 
C) $12,000 
D) $18,000 
A) $50,000 
B) $75,000 
C) $12,000 
D) $18,000

Question 20

Sarks Company has a contribution margin of $150,000 and a contribution margin ratio of 30%.How much are total variable costs?

Accepted Answer

A) $45,000 
B) $350,000 
C) $105,000 
D) $500,000 
A) $45,000 
B) $350,000 
C) $105,000 
D) $500,000

To which function of management is CVP analysis most applicable?

The break-even point

Which of the following is the correct formula for the contribution margin ratio?

Which one of the following describes the break-even point?

Which one of the following is true concerning a CVP income statement?

A company sells a product which has a unit sales price of $9, unit variable cost of $6 and total fixed costs of $60,000.How many units must the company sell to break even?

If M&H Ltd.has a margin of safety of $100,000, which of the following statements is correct?

Sample, Inc.determined its unit variable cost increased by 15%.Which one of the following will NOT increase as a direct result?

Tykee Company has the following data: Variable costs are $75 \%$ of the unit selling price The contribution margin per unit is $400. The fixed casts are $600000. Which of the following expresses the break-even point in dollars?

Which one of the following lines is not drawn separately on a CVP graph?

Which one of the following is the format of a CVP income statement?

Old Canadian Company has sales of $500,000, variable costs of $425,000, and fixed costs of $25,000.New World Company has sales of $500,000, variable costs of $200,000, and fixed costs of $250,000.Old Canadian's contribution margin ratio is

CopperZ Company has variable costs which are 40% of its unit selling price and fixed costs of $30,000.How many sales will CopperZ report at its break-even point in dollars?

Sarks Company has a contribution margin of $150,000 and a contribution margin ratio of 30%.How much are total variable costs?

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job Order Costing

Process Costing

Activity-Based-Costing

Incremental Analysis

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters

Exam 6: Cost-Volume-Profit

To which function of management is CVP analysis most applicable?

The break-even point

Which of the following is the correct formula for the contribution margin ratio?

Which one of the following describes the break-even point?

Which one of the following is true concerning a CVP income statement?

A company sells a product which has a unit sales price of $9, unit variable cost of $6 and total fixed costs of $60,000.How many units must the company sell to break even?

If M&H Ltd.has a margin of safety of $100,000, which of the following statements is correct?

Sample, Inc.determined its unit variable cost increased by 15%.Which one of the following will NOT increase as a direct result?

Tykee Company has the following data: Variable costs are 75%75 \%75% of the unit selling price The contribution margin per unit is $400. The fixed casts are $600000. Which of the following expresses the break-even point in dollars?

Which one of the following lines is not drawn separately on a CVP graph?

Which one of the following is the format of a CVP income statement?

Old Canadian Company has sales of $500,000, variable costs of $425,000, and fixed costs of $25,000.New World Company has sales of $500,000, variable costs of $200,000, and fixed costs of $250,000.Old Canadian's contribution margin ratio is

CopperZ Company has variable costs which are 40% of its unit selling price and fixed costs of $30,000.How many sales will CopperZ report at its break-even point in dollars?

Sarks Company has a contribution margin of $150,000 and a contribution margin ratio of 30%.How much are total variable costs?

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job Order Costing

Process Costing

Activity-Based-Costing

Incremental Analysis

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters

Tykee Company has the following data: Variable costs are $75 \%$ of the unit selling price The contribution margin per unit is $400. The fixed casts are $600000. Which of the following expresses the break-even point in dollars?