COST VOLUME PROFIT

Which formula is TRUE about break even point in unit?

• (Fixed cost + Profit)/CM ratio

• Sales = VC + FC + Profit

• Profit = Sales + VC + FC

• Profit = Sales + VC + FC

Margin of safety refer to…………………………………………………………………………………………………

• Difference between actual sales and sales at the BEP point

• Difference between actual profit and actual loss

• Difference between actual contribution margin and standard contribution margin

• Difference between actual sales and actual profit

Below are the method for computing a break even point EXCEPT;

• Mathematical equation

• Contribution margin method

• Graphical method

• Net profit method

One of the example of assumptions of CVP Analysis is:

• Difficult to distinguish costs exactly into variable or fixed

• The efficiency and productivity are to be unchanged

• Fluctuation in revenues or cost

• Selling price may be reduced to achieve greater volume of sales

Which statement refer to contribution margin?

• Sales price per unit minus all fixed cost

• Sales price per unit add all variable cost per unit

• Sales price per unit minus all variable cost per unit

• Sales price per unit add all fixed cost

Which statement NOT TRUE about break even point?

• Volume of activity where the organization’s revenue and expenses are equal

• Level of sales is no profit or loss

• One of application of CVP analysis

• State the amount sales can drop before losses begin

The correct formula of BEP in Ringgit Malaysia by using contribution margin method is:

• Fixed cost divide by contribution margin per unit

• Fixed cost divide by contribution margin ratio

• Fixed cost divide by net profit per unit

• Fixed cost divide by net profit ratio

The purpose of CVP analysis is to estimate how profits are affected by the following factors EXCEPT:

• Selling price

• Sales volume

• Supplier discount

• Total cost

One of the limitation of CVP Analysis is…………………………………………..

• Fluctuation in revenue or costs

• Cost are linear

• Selling price are constant

• Revenue are linear

What is the importance of MOS to the company?

• Company can predict how their decision will affect sales, cost and net income

• Company can take the necessary precautions to avoid any drop in sales

• Company can enhances a manager’s ability to make economic decision

• Company can improve their performance