QUIZ 1

To which function of management is CVP analysis most applicable

• Planning

• Organizing

• Controlling

• Directing

As projected net income increases the

• degree of operating leverage declines

• margin of safety stays constant

• break-even point goes down

• contribution margin ratio goes up

The amount by which sales revenue could drop until a loss occurs is referred to as the:

• Sales volume variance

• Margin of safety

• Production contribution rate

• Degree of operating leverage

If company raises its target peso profit

• break-even point rises

• fixed costs increase

• required total contribution margin increases

• selling price increases

a relatively low margin of safety ratio for a product is usually an indication that product

• is losing money

• has a high contribution margin

• is high risk than higher margin of safety products

• is less risky than higher margin of safety products