Cost Accounting Part 4

Level of activity where total revenues equals total variable cost and fixed cost

• CVP

• Break Even Point

• Operating Leverage

• Target Profit

It is the difference between actual or expected sales and sales at the break-even point

• Margin of Selling Price

• Margin of Sales

• Margin of Safety

• Margin of Sales Mix

What is the Break Even Percentage if the Margin of Safety is 60%

• 0%

• 60%

• 40%

• 100%

Sales - Php100,000, VC - Php80,000, Fixed Cost - Php10,000. How much is Operating Leverage

• 1

• 2

• 0.5

• 2.5

SP - P500, VC/unit - P300, Total Fixed Cost P100,000. How much is sales in peso if the target profit is P50,000

• P250,000

• P375,000

• P50,000

• P100,000

As volume increases, average cost per unit

• decrease

• remain constant

• increase

• increases in proportion to the change in volume.

If a company is operating at a loss,

• fixed costs are greater than sales

• selling price is less than average total cost per unit.

• selling price is lower than variable cost per unit.

• fixed cost per unit is greater than variable cost per unit.

All else constant, if the selling price falls,

• contribution margin percentage will be higher than expected.

• per-unit contribution margin will be lower than expected.

• total variable costs will be lower than expected.

• total contribution margin will be higher than expected.

Which of the following is a fixed cost for an automobile manufacturing plant?

• administrative salaries

• electricity used by assembly-line machines

• sales commissions

• windows for each car produced

Within the relevant range, if there is a change in the level of the cost driver, then:

• fixed and variable costs per unit will change

• fixed and variable costs per unit will remain the same

• fixed costs per unit will remain the same and variable costs per unit will change

• fixed costs per unit will change and variable costs per unit will remain the same