Cost, Volume and Profit Analysis MCQs November 7, 2020November 20, 2018 by Abbas Ahmad Please enter your email: 1. If contribution margin is positive? Profit will occur Both a profit and loss are possible Profit will occur if the fixed expenses are greater than the contribution margin A loss will occur if the contribution margin is greater than fixed expenses 2. At the breakeven point: Profit is $0 Fixed Cost + Variable Cost = Sales Fixed Cost = Contribution Margin All of the above 3. A complete CVP graph will show that profit or loss at any level of sales is measured by: A vertical line between the fixed cost line and the x-axis A horizontal line between the revenue line and the Y-axis A vertical line between the total revenue line and the total expenses line A horizontal line between the total revenue line and the total expenses line 4. Contribution margin ratio is: Total Contribution Margin / Sales Sales / Contribution Margin per unit Fixed Cost / Contribution margin per unit Sales / Variable costs 5. The impact on net operating income of any given dollar change in total sales can be computed by applying which ratio to the dollar change? Profit margin Variable cost ratio Contribution Margin Ratio of Variable to Fixed Expenses 6. The Hino Corporation has a breakeven point when sales are $160,000 and variable costs at that level of sales are $100,000. How much would contribution margin increase or decrease, if variable expenses dropped by $20,000? 37.5% 60% 12.5% 26% 7. Which of the following represents the CVP equations? Sales = Contribution margin + Fixed expenses + Profits Sales = Contribution margin ratio + Fixed expenses + Profits Sales = Variable expenses + Fixed expenses + Profits Sales = Variable expenses – Fixed expenses + Profits 8. Margin of safety is a term best described as the excess of: Contribution margin over fixed expenses Total expenses over the breakeven point Sales over the breakeven point Sales over total costs Loading … Next Quiz: Decision Making- Multiple Choice Questions (MCQs) Related posts: Q. 3. Define Cost Volume Profit (C.V.P), Profit Volume Ratio (PVR) and Margin of Safety (MOS). Applications of Cost-Volume Profit (CVP) Analysis Contribution Margin What is cost volume profit (CVP) analysis? Contribution margin ratio

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