CVP Analysis

Which of the following is true about CVP analysis?

• shows how profit will be affected by alternative sales volumes, selling prices and costs.​

• sometimes also called break-even analysis

• is based on a simple profit calculation involving revenues and costs.​

• all of these are true about CVP analysis

Which of the following is true about fixed costs?

• Constant in total for a specific time period.

• • Not affected by differences in volume during that same period.​

• Depicted by the horizontal straight line on a graph,

• All of these are true about fixed costs

Variable costs...

• • Change in a time period in direct proportion to a change in volume.​

• Depicted by a sloping line on a graph,

• Constant per unit of volume

• Variable costs are all of these

What is the total costs equation?

• Total costs = fixed costs + (variable costs per unit x sales volume)

• Total costs = variable costs + (fixed costs per unit x sales volume)

• Total costs = variable costs - (fixed costs per unit x sales volume)

• Total costs = fixed costs - (variable costs per unit x sales volume)

What is this graph called?

• Profit graph

• Contribution margin graph

• Balance sheet graph

• All of these are correct

How much are fixed costs?

• $20,000

• $40,000

• $80,000

• $60,000

How many units need to be sold to break even?

• 2,000

• 4,000

• 8,000

• 0

If the business sells 2000 units, how much profit will it make?

• $10,000

• $30,000

• $20,000

• None of these. It will make a loss

If the business sells 8000 units, how much profit will it make?

• $10,000

• $30,000

• $20,000

• None of these. It will make a loss

What best describes this type of graph?

• Profit graph using the contribution margin

• Fixed margin graph

• Balance sheet graph

• All of these are correct