Cost-Volume-Profit Analysis - Operating Income

What is the primary goal of Cost-Volume-Profit analysis?

• To determine employee productivity

• To calculate tax liabilities

• To assess the impact of cost and volume changes on profitability

• To measure changes in stock prices

How is operating income calculated?

• Revenue minus cost of goods sold and operating expenses

• Revenue minus taxes

• Revenue minus cost of goods sold

• Revenue minus operating expenses

What is the formula for calculating the break-even point?

• Total revenue divided by total fixed cost

• Total fixed cost divided by total revenue

• Total fixed cost divided by contribution margin per unit

• Total variable cost divided by contribution margin per unit

What is the contribution margin?

• Revenue from sales minus operating expenses

• Total revenue minus total costs

• Revenue from sales minus variable costs

• Revenue from sales minus fixed costs

At the break-even point, what is the value of operating income?

• Positive

• Negative

• Equal to total revenue

• Zero