Managerial Acctg

To which function of management is CVP analysis most applicable?

• Planning

• Organizing

• Directing

• Controlling

The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed:

• contribution margin analysis

• cost-volume-profit analysis

• budgetary analysis

• gross profit analysis

The term contribution margin is best defined as the:

• difference between fixed costs and variable costs.

• difference between revenue and fixed costs.

• amount available to cover fixed costs and profit.

• amount available to cover variable costs.

Cost-volume-profit analysis allows management to determine the relative profitability of a product by

• Highlighting potential bottlenecks in the production process.

• Determining the contribution margin per unit and projected profits at various levels of production.

• Assigning costs to a product in a manner that maximizes the contribution margin.

• Keeping fixed costs to an absolute minimum.

Cost-volume-profit analysis cannot be used if which of the following occurs?

• Costs cannot be properly classified into fixed and variable costs.

• The per unit variable costs change.

• The total fixed costs change.

• Per unit sales prices change.