Question 1

Which of the following descriptions describes contribution?

Accepted Answer

A)  Revenue - total costs 
B)  Revenue - semi-variable costs 
C)  Revenue - variable costs 
D)  Revenue - fixed costs 
A)  Revenue - total costs 
B)  Revenue - semi-variable costs 
C)  Revenue - variable costs 
D)  Revenue - fixed costs C

Question 2

AJ Ltd is an motor car insurance broker. Staff are paid a fixed wage then a commission for each sale of car insurance completed. (a)   (c)   (b)   (d)   Which of the above graphs reflects AJ s labour costs?

Accepted Answer

A)  Graph (a) 
B)  Graph (b) 
C)  Graph (c) 
D)  Graph (d) 
A)  Graph (a) 
B)  Graph (b) 
C)  Graph (c) 
D)  Graph (d) D

Question 3

Martin Green owns a hairdressing shop. He employs 5 hairdressers. The list below shows some of the costs that he incurs: 
(i) Salaries of hairdressers 
(ii) Depreciation of chairs and equipment 
(iii) Lease on shop 
(iv) Rates 
Which of the costs can be regarded as variable in nature?

Accepted Answer

A)  Non of them 
B)  All of them 
C)  (i) and (iii) 
D)  (ii) and (iv) 
A)  Non of them 
B)  All of them 
C)  (i) and (iii) 
D)  (ii) and (iv) A

Question 4

In practice all costs can be divided in fixed and variable.

Accepted Answer

A) True 
 B)False

Question 5

The graph above represents:

Accepted Answer

A)  Variable costs 
B)  Stepped costs 
C)  Fixed costs 
D)  Semi variable costs 
A)  Variable costs 
B)  Stepped costs 
C)  Fixed costs 
D)  Semi variable costs

Question 6

The graph above represents:

Accepted Answer

A)  Variable costs 
B)  Semi variable costs 
C)  Stepped costs 
D)  Marginal costs 
A)  Variable costs 
B)  Semi variable costs 
C)  Stepped costs 
D)  Marginal costs

Question 7

The independent variable is the cost to be predicted.

Accepted Answer

A) True 
 B)False

Question 8

Total variable cost will increase and decrease in direct proportion to the increase and decrease in activity levels.

Accepted Answer

A) True 
 B)False

Question 9

A company manufactures and sells a single product. At the budget output of 1,000 units per week the cost per unit is: 
 
 The breakeven point in sales revenue per week (to the nearest thousand pounds) is:

Accepted Answer

A)  £40000 
B)  £46000 
C)  £62000 
D)  £75000 
A)  £40000 
B)  £46000 
C)  £62000 
D)  £75000

Question 10

It is assumed that in linear cost functions their is only one independent variable.

Accepted Answer

A) True 
 B)False

Question 11

Cost estimation relates to the ability for accountants to make estimates of the cost of future projects.

Accepted Answer

A) True 
 B)False

Question 12

The relevant range of activity is the levels of activity the firm has experienced in the past and is more confident to predict in the future.

Accepted Answer

A) True 
 B)False

Question 13

The contribution margin is equal to the sales price per unit less the variable cost per unit.

Accepted Answer

A) True 
 B)False

Question 14

Rob and John Ltd manufactures a standard model of vacuum cleaner. The selling price of each cleaner is £155. Variable costs of manufacture are £55.00. During its 20X1 financial year the company expects to incur fixed production costs of £80000 and fixed selling and administration overheads of £36000. How many vacuum cleaners will the company have to sell in order to break-even (to the nearest whole unit)?

Accepted Answer

A)  1670 
B)  1409 
C)  1130 
D)  1160 
A)  1670 
B)  1409 
C)  1130 
D)  1160

Question 15

Higgins Ltd manufactures a standard model of pressure cooker. The selling price of each pressure cooker is £45. Variable costs of manufacture are £10.70. During its 20X1 the company expects to incur fixed overheads of £110000. The sales director expects to sell 5000 pressure cookers during 20X1. What is the margin of safety (in units, to nearest whole unit)?

Accepted Answer

A)  1290 
B)  1956 
C)  1793 
D)  1876 
A)  1290 
B)  1956 
C)  1793 
D)  1876

Question 16

Variable cost functions are in reality curvilinear not linear as we assume in Cost profit analysis.

Accepted Answer

A) True 
 B)False

Question 17

Cost-volume-profit analysis is a tool for working out the sales revenue on future projects

Accepted Answer

A) True 
 B)False

Question 18

JJ Ltd is a landscape gardener and sub contracts labour as their contracts increase or decline. (a)   (c)   (b)   (d)   Which of the above graphs reflect JJ Ltd s labour cost?

Accepted Answer

A)  Graph (a) 
B)  Graph (b) 
C)  Graph (c) 
D)  Graph (d) 
A)  Graph (a) 
B)  Graph (b) 
C)  Graph (c) 
D)  Graph (d)

Question 19

A cost is a fixed cost if it only changes in relation to total sales revenue.

Accepted Answer

A) True 
 B)False

Question 20

The graph above represents:

Accepted Answer

A)  Variable costs 
B)  Marginal costs 
C)  Fixed costs 
D)  Semi variable costs 
A)  Variable costs 
B)  Marginal costs 
C)  Fixed costs 
D)  Semi variable costs

Which of the following descriptions describes contribution?

AJ Ltd is an motor car insurance broker. Staff are paid a fixed wage then a commission for each sale of car insurance completed. (a) (c) (b) (d) Which of the above graphs reflects AJ s labour costs?

Martin Green owns a hairdressing shop. He employs 5 hairdressers. The list below shows some of the costs that he incurs: (i) Salaries of hairdressers (ii) Depreciation of chairs and equipment (iii) Lease on shop (iv) Rates Which of the costs can be regarded as variable in nature?

In practice all costs can be divided in fixed and variable.

The graph above represents:

The graph above represents:

The independent variable is the cost to be predicted.

Total variable cost will increase and decrease in direct proportion to the increase and decrease in activity levels.

A company manufactures and sells a single product. At the budget output of 1,000 units per week the cost per unit is: The breakeven point in sales revenue per week (to the nearest thousand pounds) is:

It is assumed that in linear cost functions their is only one independent variable.

Cost estimation relates to the ability for accountants to make estimates of the cost of future projects.

The relevant range of activity is the levels of activity the firm has experienced in the past and is more confident to predict in the future.

The contribution margin is equal to the sales price per unit less the variable cost per unit.

Variable cost functions are in reality curvilinear not linear as we assume in Cost profit analysis.

Cost-volume-profit analysis is a tool for working out the sales revenue on future projects

JJ Ltd is a landscape gardener and sub contracts labour as their contracts increase or decline. (a) (c) (b) (d) Which of the above graphs reflect JJ Ltd s labour cost?

A cost is a fixed cost if it only changes in relation to total sales revenue.

The graph above represents:

Introduction to Accounting

Wealth and the Measurement of Profit

The Measurement of Wealth

The Income Statement and the Cash Flow Statement

Introduction to the Worksheet

Inventory

Amounts Receivable and Amounts Payable

Non-Current Assets, Fixed Assets, and Depreciation

Financing and Business Structures

Cash Flow Statements

Final Accounts and Company Accounts

Financial Statement Analysis

Internal Users and Internal Information

Planning and Control

Accounting for Overheads and Product Costs

Accounting for Decision-Making: When There Are No Resource Constraints

Accounting for Decision-Making: Resource Constraints and Decisions Which Are Mutually Exclusive

Budgets

Investment Decisions

Management of Working Capital

Filters

Exam 15: Cost Behaviour and Cost-Volume-Profit Analysis

Which of the following descriptions describes contribution?

AJ Ltd is an motor car insurance broker. Staff are paid a fixed wage then a commission for each sale of car insurance completed. (a) (c) (b) (d) Which of the above graphs reflects AJ s labour costs?

Martin Green owns a hairdressing shop. He employs 5 hairdressers. The list below shows some of the costs that he incurs: (i) Salaries of hairdressers (ii) Depreciation of chairs and equipment (iii) Lease on shop (iv) Rates Which of the costs can be regarded as variable in nature?

In practice all costs can be divided in fixed and variable.

The graph above represents:

The graph above represents:

The independent variable is the cost to be predicted.

Total variable cost will increase and decrease in direct proportion to the increase and decrease in activity levels.

A company manufactures and sells a single product. At the budget output of 1,000 units per week the cost per unit is: The breakeven point in sales revenue per week (to the nearest thousand pounds) is:

It is assumed that in linear cost functions their is only one independent variable.

Cost estimation relates to the ability for accountants to make estimates of the cost of future projects.

The relevant range of activity is the levels of activity the firm has experienced in the past and is more confident to predict in the future.

The contribution margin is equal to the sales price per unit less the variable cost per unit.

Variable cost functions are in reality curvilinear not linear as we assume in Cost profit analysis.

Cost-volume-profit analysis is a tool for working out the sales revenue on future projects

JJ Ltd is a landscape gardener and sub contracts labour as their contracts increase or decline. (a) (c) (b) (d) Which of the above graphs reflect JJ Ltd s labour cost?

A cost is a fixed cost if it only changes in relation to total sales revenue.

The graph above represents:

Introduction to Accounting

Wealth and the Measurement of Profit

The Measurement of Wealth

The Income Statement and the Cash Flow Statement

Introduction to the Worksheet

Inventory

Amounts Receivable and Amounts Payable

Non-Current Assets, Fixed Assets, and Depreciation

Financing and Business Structures

Cash Flow Statements

Final Accounts and Company Accounts

Financial Statement Analysis

Internal Users and Internal Information

Planning and Control

Accounting for Overheads and Product Costs

Accounting for Decision-Making: When There Are No Resource Constraints

Accounting for Decision-Making: Resource Constraints and Decisions Which Are Mutually Exclusive

Budgets

Investment Decisions

Management of Working Capital

Filters