Topic 9 Cost-Volume Analysis

Contribution margin is the difference between sales and _______________? 

• Revenue

• Variable cost

• Profit

• Fixed cost

Mellissa Ltd provides the following information:

Selling price per unit: $80

Variable cost per unit: $64

Fixed costs per month: $540,000

How much is the contribution margin per unit?

• $144

• $80

• $64

• $16

Mellissa Ltd provides the following information:

Selling price per unit: $80

Variable cost per unit: $64

Fixed costs per month: $540,000

How much is the contribution margin ratio?

• 1.00

• 0.80

• 0.20

• 0.02

Mellissa Ltd provides the following information:

Selling price per unit: $80

Variable cost per unit: $64

Fixed costs per month: $540,000

What is the break-even point in terms of units sold?

• 33,750

• 37,350

• 35,730

• 33,570

Mellissa Ltd provides the following information:

Selling price per unit: $80

Variable cost per unit: $64

Fixed costs per month: $540,000

What is the break-even point in terms of sales revenues?

• 2,858,400

• 2,685,600

• 2,988,000

• 2,700,000

What is the term for the level of activity at which total revenues equal total costs?

• Semi-variable point

• Variable point

• Fixed point

• Break-even point

The amount by which an item contributes towards covering fixed cost and providing for profit is known as: 

• Gross profit

• Contribution margin

• Net margin

• Gross margin

If the amount of contribution margin is not enough to cover all fixed expenses, the business will ________.

• Neither earn a profit nor suffer a loss

• Suffer a loss

• Earn a profit

• Be closed