Management Accounting

Which of the following are true about breakeven point

• Contribution margin equals fixed costs

• The level of sales at which profit is zero

• Contribution margin equals variable costs

• The amount of expense at which profit is zero

The accountant wants to assign costs to boxes of biscuits. Which costs can be traced directly to boxes of biscuits?

• The cost of flour and baking soda

• The cost of packing labor

• The wages of the mixing labor

• All of these

Cost is classified into:

• Cost and expense
• Expense and revenue
• Indirect expense and Overheads
• Direct cost and Indirect cost

The following expense is an example of a variable cost

• Rent

• Materials

• Depreciation

Break-even quantity for the multiple-product firm can be calculated by

• dividing segment fixed cost by the weighted average contribution per unit

• dividing total fixed cost by the weighted average contribution per unit

• dividing total fixed cost by the overall variable

• multiplying total fixed cost by sales mix

A company produces mirrors. The sales price is €100.

The variable costs per unit are €25 and the total fixed costs are €50,000. In total ....(fill in)...... products need to be sold to break-even.

• 667

• 666

• 668

• 669

• 700

The total contribution margin is the

• difference between sales and total cost

• difference between sales and total variable cost

• amount by which sales exceed total fixed cost

• difference between sales and operating income

As volume/unit decreases, total fixed costs

• are constant and cost per unit decreases

• are constant and cost per unit increases

• increase

• decrease

Contribution Margin Ratio is calculated

• (Selling price-Variable costs)/Fixed costs

• Contribution margin/Fixed costs

• (Selling price-Variable costs)/Sales

• Contribution margin/Variable costs

A company has a cost structure with relative high fixed costs and relative low variable cost per unit, for this company it is most important to focus on:

• Increasing volume

• Increasing margin