WorksheetsPop Quiz Chapter 3 & 4
Total questions: 35
Worksheet time: 39mins
A variable cost per unit remains constant at various levels of activity.
true
false
A fixed cost remains constant in total and also on a per unit basis at various levels of activity.
true
false
If volume increases, all costs will increase.
true
false
If the activity level decreases, total variable costs will decrease proportionately.
true
false
Changes in the level of activity will cause unit variable and unit fixed costs to change in opposite directions.
true
false
The high-low method can be used in classifying a mixed cost into its variable and fixed elements.
true
false
In high-low method; the difference between the costs at the high and low levels of activity represents the FIXED COST element of a mixed cost.
true
false
The fixed cost element of a mixed cost is the cost of having a service available.
true
false
When applying the high-low method, the variable cost element of a mixed cost is calculated before the fixed cost element.
true
false
We study about cost behaviour is to help us understanding CVP Analysis elements.
true
false
Select all items that can be categorized as CVP analysis elements. (there are more than 1 answer)
total fixed cost
variable cost per unit
a specific period of time
number of units sold
selling price per unit
In CVP analysis, the term “cost” includes manufacturing costs, and selling and administrative expenses.
true
false
Contribution margin is the amount of revenues remaining after deducting cost of goods sold.
true
false
Both variable and fixed costs are included in calculating the contribution margin.
true
false
Choose correct statements about contribution margin (CM) ..(the answer is more than 1)
CM = Total Sales - Total Cost
CM = Total Sales - Total Variable Cost
CM per unit = px - bx
CM per unit = price per unit - variable cost per unit
CM per unit = p - b
At break-even point; CM = a
true
false
Select correct statements about break-even point. ..(the answer is more than 1)
The break-even point is where total sales equals to total fixed costs
The break-even point is where total sales equals to total costs
At break-even point; company suffer great losses
At break-even point; company experience no profit or loss
Break-even point in unit = Fixed Cost ÷ CM per unit
The margin of safety is the difference between sales at break-even and sales at a determined activity level.
true
false
The margin of safety ratio or % is equal to the margin of safety in unit divided by the actual or (expected) sales volume.
true
false
Select the correct formulas
BEP in RM = BEP in unit x p
NP = px - bx - a
NP = CM - a
Margin of safety (RM) = px - BEP in RM
b = p - CM per unit
The bigger the BEP, the better it is..
true
false
The bigger the Contribution Margin (CM), the better it is..
true
false
The bigger the Margin of Safety, the better it is..
true
false
The high-low method is used in classifying a mixed cost into its variable and fixed elements.
true
false
A mixed cost has both selling and administrative cost elements.
true
false
A cost that remains constant per unit at various levels of activity is a
variable cost.
fixed cost.
mixed cost.
manufacturing cost.
Fixed costs normally will not include
property taxes.
direct labor.
supervisory salaries.
depreciation on buildings and equipment.
Which of the following is logically not an underlying assumption of CVP analysis?
Changes in activity are the only factors that affect costs.
Cost classifications are reasonably accurate.
Beginning inventory is larger than ending inventory.
Price per unit and variable cost per unit is constant
CVP analysis is not important in..
calculating depreciation expense.
setting selling prices.
determining unit of sales to break-even.
utilizing production facilities.
Contribution margin ..
is always the same as gross profit margin.
excludes variable selling costs from its calculation.
is calculated by subtracting total manufacturing costs per unit from sales revenue per unit.
equals sales revenue minus variable costs.
The break-even point cannot be determined by ..
computing it from a mathematical equation.
computing it using contribution margin.
reading the prior year's financial statements.
deriving it from a CVP graph.
The margin of safety is the difference between contribution margin and fixed costs.
true
false
Which of the following would be the least controllable fixed costs?
Property tax
Rent
Research and development
Management training programs
A mixed cost contains ..
a variable element and a fixed element.
both selling and administrative costs.
both retailing and manufacturing costs.
both operating and non-operating costs.
An example of a mixed cost is ..
direct materials.
supervisory salaries.
utility costs.
property taxes.
