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WorksheetsCOST ACCOUNTING -CPV ANALYSIS
Total questions: 10
Worksheet time: 3mins
to which function of management is CVP analysis most applicable
planning
organizing
directing
controlling
The systematic examination of the relationships among selling prices, volume of sales and production costs and profit is called
contribution margin analysis
cost-volume-profit analysis
budgetary analysis
gross profit analysis
The term contribution margin is best defined as the
difference between fixed cost and variable cost
difference between revenue and fixed costs
amount available to cover fixed cost and profit
amount to cover variable cost
Cost-volume-profit analysis allows management to determine the relative profitability of a product by
highlighting potential bottlenecks in the production process
Determining the contribution margin per unit and projected profit at various levels of production
assigning costs to a product in a manner that maximizes the contribution margin
keeping fixed cost to an absolute minimum
Cost-volume-profit analysis cannot be used if which of the following occurs?
cost cannot be properly classified into fixed and variable cost
the per unit variable costs change
The total fixed cost change
per unit sales prices changes
The most useful information derived from a breakeven chart is the
amount of sales revenue needed to cover enterprise variable cost
amount of sales revenue needed to cover enterprise fixed cost
relationship among revenues, variable cost and fixed cost at various levels of activity
volume or output level at which the enterprise breaks even
Which of the factors is (are ) involved in studying cost-volume-profit relationships
level of production
variable cost
fixed cost
all of the given answer
at the breakeven point fixed cost is always
less than contribution margin
equal to contribution margin
more than contribution margin
more than the variable cost
at the break even point
net income will increase by the unit contribution margin for each additional item sold above break even
the total contribution margin changes from negative to positive
fixed cost are greater than contribution margin
the contribution margin ratio begin to increase
Which of the following is not an assumption underlying C-P-V analysis
the behavior of total revenue is linear
unit variable expenses remain unchanged as activity varies
inventory levels at the beginning and the end of the period are the same
the number of units produced exceeds the number of units sold
