Cost-Volume-Profit and Break-Even Analysis Quiz
11 multiple-choice questions with answers and explanations · 2 easy, 6 medium, 3 hard
Contribution margin, the break-even point in units and in sales, margin of safety, target profit, operating leverage and sales mix.
- 1Contribution Margin: The FormulaContribution margin is calculated as:easy
- 2Break-Even Point: What Does It Mean?At the break-even point:easy
- 3Break-Even Point in Units: The CalculationA product sells for $50 per unit and has a variable cost of $30 per unit. Fixed costs are $60,000. What is the break-even point in units?medium
- 4Break-Even Point in Sales Dollars: Using the Contribution Margin RatioFixed costs are $90,000 and the contribution margin ratio is 30%. What is break-even sales revenue?medium
- 5Margin of Safety: The CalculationActual sales are 5,000 units and the break-even point is 3,500 units. What is the margin of safety as a percentage of actual sales?medium
- 6Cost-Volume-Profit Analysis: Units Needed for a Target ProfitA product sells for $40 with a variable cost of $25 per unit. Fixed costs are $45,000. How many units must be sold to earn a profit of $30,000?medium
- 7Cost-Volume-Profit Analysis: Effect of Higher Fixed Costs on Break-EvenIf fixed costs increase while the selling price and variable cost per unit stay the same:medium
- 8Cost-Volume-Profit Analysis: Which Is an Assumption of the Model?Which of the following is an assumption of cost-volume-profit analysis?medium
- 9Cost-Volume-Profit Analysis: Profit at a Given Sales VolumeA product sells for $80 with a variable cost of $50 per unit. Fixed costs are $120,000. What is the profit if 6,500 units are sold?hard
- 10Operating Leverage: Effect of a Sales Increase on ProfitA business has a contribution margin of $200,000 and an operating profit of $50,000. If sales volume rises by 10%, operating profit will rise by:hard
- 11Break-Even Analysis with a Sales Mix of Two ProductsProducts A and B are sold in the ratio 2 : 1. Contribution per unit is $10 for A and $25 for B. Fixed costs are $90,000. How many units of A are sold at break-even?hard