Exam 15: Cost Behaviour and Cost-Volume-Profit Analysis
Exam 1: Introduction to Accounting19 Questions
Exam 2: Wealth and the Measurement of Profit17 Questions
Exam 3: The Measurement of Wealth16 Questions
Exam 4: The Income Statement and the Cash Flow Statement17 Questions
Exam 5: Introduction to the Worksheet17 Questions
Exam 6: Inventory17 Questions
Exam 7: Amounts Receivable and Amounts Payable18 Questions
Exam 8: Non-Current Assets, Fixed Assets, and Depreciation19 Questions
Exam 9: Financing and Business Structures16 Questions
Exam 10: Cash Flow Statements15 Questions
Exam 11: Final Accounts and Company Accounts19 Questions
Exam 12: Financial Statement Analysis19 Questions
Exam 13: Internal Users and Internal Information18 Questions
Exam 14: Planning and Control16 Questions
Exam 15: Cost Behaviour and Cost-Volume-Profit Analysis20 Questions
Exam 16: Accounting for Overheads and Product Costs20 Questions
Exam 17: Accounting for Decision-Making: When There Are No Resource Constraints20 Questions
Exam 18: Accounting for Decision-Making: Resource Constraints and Decisions Which Are Mutually Exclusive20 Questions
Exam 19: Budgets20 Questions
Exam 20: Investment Decisions20 Questions
Exam 21: Management of Working Capital20 Questions
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Which of the following descriptions describes contribution?
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(Multiple Choice)
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Correct Answer:
C
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?




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(Multiple Choice)
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Correct Answer:
D
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?
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(Multiple Choice)
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Correct Answer:
A
Total variable cost will increase and decrease in direct proportion to the increase and decrease in activity levels.
(True/False)
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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:

(Multiple Choice)
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It is assumed that in linear cost functions their is only one independent variable.
(True/False)
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Cost estimation relates to the ability for accountants to make estimates of the cost of future projects.
(True/False)
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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.
(True/False)
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The contribution margin is equal to the sales price per unit less the variable cost per unit.
(True/False)
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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)?
(Multiple Choice)
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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)?
(Multiple Choice)
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Variable cost functions are in reality curvilinear not linear as we assume in Cost profit analysis.
(True/False)
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Cost-volume-profit analysis is a tool for working out the sales revenue on future projects
(True/False)
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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?




(Multiple Choice)
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A cost is a fixed cost if it only changes in relation to total sales revenue.
(True/False)
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