CVP Analysis Quiz

What is the primary purpose of Cost-Volume-Profit (CVP) analysis?

• To determine the level of taxes to be paid

• To calculate the amount of fixed costs

• To understand the relationship between costs, volume, and profit

• To forecast cash flows

Which of the following represents the contribution margin per unit?

• Sales price per unit - Fixed cost per unit

• Sales price per unit - Total cost per unit

• Sales price per unit - Variable cost per unit

• Variable cost per unit - Fixed cost per unit

The contribution margin ratio is calculated as:

• Contribution margin per unit / Sales price per unit

• Contribution margin per unit / Fixed cost

• Sales price per unit / Variable cost per unit

• Fixed cost / Contribution margin per unit

Which of the following will increase the break-even point?

• A decrease in fixed costs

• An increase in variable costs per unit

• A reduction in sales volume

• An increase in the sales price per unit

Which formula is used to calculate the break-even point in units?

• Fixed costs / Contribution margin ratio

• (Sales price - Variable cost) / Fixed cost

• Fixed costs / Contribution margin per unit

• Sales price / (Fixed cost - Variable cost)

If a company's break-even point is 5,000 units, and the fixed costs are $100,000, what is the contribution margin per unit?

• $10

• $20

• $30

• $50

The margin of safety is calculated as:

• Actual sales - Break-even sales

• Sales price - Variable costs

• Break-even units / Actual units

• Fixed costs / Contribution margin ratio

In CVP analysis, it is assumed that:

• The per-unit variable cost changes with production volume

• All units produced are not sold

• Total fixed costs change with production volume

• The sales price per unit remains constant

Which of the following factors is not typically analyzed in CVP analysis?

• Fixed costs

• Variable costs

• Interest rates

• Sales price per unit

If the sales price per unit is $25, the variable cost per unit is $15, and the fixed costs are $50,000, what is the break-even point in units?

• 1,500 units

• 2,000 units

• 2,500 units

• 3,000 units