BE Analysis Quiz

Contribution Margin Ratio is calculated

• (Sales-Variable costs)/Fixed costs

• Contribution margin/Fixed costs

• (Sales-Variable costs)/Sales revenue

• Contribution margin/Variable costs

Contribution margin goes toward

• Fixed and variable costs

• Variable costs

• Only profit

• Fixed cost and profit

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

Once a company hits the breakeven point, net operating income will increase by the amount of BLANK for each additional unit

• Variable costs

• Contribution margin per unit

• Fixed costs

• Sales dollars

The contribution margin increase when sales volume remain the same and

• variable cost per unit decrease

• variable cost per unit increase

• fixed cost decrease

• fixed cost increase

The contribution margin ratio always increase when the

• break-even point increases

• break-even point decreases

• variable cost as a percentage of net sales decrease

• variable cost as a percentage of net sales increase

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

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

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