Chap 10

Is the following statement about contribution true or false?
“Contribution per unit is the difference between the selling price per unit and the variable costs per unit”

• True

• False

is the following formula to calculate profit true or false?
Profit = (sales volume x contribution per unit) – fixed cost per unit

• True

• False

is the following formula to calculate breakeven point true or false?

• True

• False

Is the following statement about breakeven point true or false?
“Breakeven point is the activity level at which there is neither s profit nor a loss.”

• True

• False

is the following statement about traditional breakeven chart true or false?
“The breakeven point where the sales revenue line crosses the total cost line”

• True

• False

is the following statement about traditional breakeven chart true or false?
“The breakeven point where the sales revenue line crosses the fixed cost line”

• True

• False

is the following statement about margin of safety true or false?
“The margin of safety is the difference in units between the budgeted sales volume and the actual sales volume

• True

• False

“If margin of safe for product Z is 2000 unit then actual sales can fall short of budget by 2000 units before the breakeven point is reached and no profit is made”

• True

• False

is the following statement about CVP analysis true or false?
“CVP analysis is the study of the interrelationships between contribution, volume and profit at various levels of activity

• True

• False

Is the following statement about the variable cost line on a contribution breakeven chart true or false? “The variable cost line on a contribution breakeven chart starts at origin.

• True

• False