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MARGINALCOSTING AND BEP ANLYSIS-Quiz1 by Dr Ch.H.G.Rao

Total questions: 30

Worksheet time: 17mins

Name
Class
Date
1.

A study of the effects of changes in costs and volume on a company’s profits.

a)

Cost Volume Profit Analysis

b)

Break-even Analysis

c)

Marginal Analysis

d)

Incremental Analysis

2.
Which of the following is the best definition of PROFIT?
a)
The total amount of income a business makes from selling products or services
b)
The amount of money a business has left over after paying for their costs.
c)
The total amount of money a business spends.
3.
How do we calculate total costs?
a)
Fixed Costs - Variable Costs
b)
Total Revenue - Fixed Costs
c)
Variable Costs x Total Revenue
d)
Fixed Costs + Variable Costs
4.

The shape of Marginal cost is

a)

U shaped

b)

S shaped

5.

(a)   costs change directly with output.

6.

(a)   costs don't vary as the business changes its output

7.

The total costs are calculated as the sum of the (a)   costs and the variable costs.

8.

Fixed or Variable?

Wages paid for factory labour?

a)

Fixed

b)

Variable

9.

Fixed or Variable?

Raw materials

a)

Fixed

b)

Variable

10.

Fixed or Variable?

Office rent

a)

Fixed

b)

Variable

11.

Fixed or Variable?

Insurance

a)

Fixed

b)

Variable

12.

Fixed or Variable?

Salaries

a)

Fixed

b)

Variable

13.
If you own a home, you must pay for electricity you use.  The amount you pay changes every month depending on how much you use. This is an example of a...
a)
FIXED cost.
b)
VARIABLE cost.
14.
Your business rents a building on Main Street in Dewsbury.  Every month you pay exactly £750 to rent the building.  This is an example of a...
a)
FIXED cost.
b)
VARIABLE cost.
15.
Management salaries are an example of
a)
Fixed costs
b)
Variable costs
16.

Marginal costing is a _____ of costing.

a)

step

b)

method

c)

technique

d)

process

17.

Marginal cost is _____ cost.

a)

Fixed

b)

Variable

c)

Semi-Variable

d)

Stepped

18.

BEP is a point where there,s no _____ no _____.

a)

fixed cost, variable cost

b)

profit, loss

c)

sales, contribution

d)

none of the above

19.

_____ is excess of actual sales over break even sales.

a)

Contribution

b)

Desired Sales

c)

Margin of Safety Sales

d)

Profit

20.

Profit is excess of _____ over fixed cost.

a)

Sales

b)

Variable Cost

c)

Contribution

d)

Loss

21.

_________ is the difference between actual sales and Break Even sales.

a)

Contribution

b)

Margins of Safety

c)

Profit Volume

d)

Profit

22.

Contribution is excess of sales over _____.

a)

Variable Cost

b)

Fixed Cost

c)

Profit

d)

Loss

23.

Fixed cost per unit decreases when __________

a)

production volume increases

b)

production volume decreases

c)

variable cost per unit decreases

d)

prime cost per unit decreases

24.

(a)   costs change directly with output.

25.
You own a restaurant and every month you must pay your water bill. However, you never know how much that bill will be because the amount changes based upon how much water your business uses.  This is a...
a)
FIXED cost.
b)
VARIABLE cost.
26.
When a business has made enough money to pay its costs and begin to make a profit, it has reached its
a)
break-even point
b)
variable-cost margin
c)
fixed cost
d)
selling price
27.
A business that does not reach break-even will
a)
go bankrupt
b)
have profit and loss
c)
lose money
d)
need to relocate
28.
One of the main purposes for calculating break-even is to help the business to
a)
determine stock value
b)
prepare an income statement
c)
forecast sales
d)
set selling prices
29.
Businesses calculate break-even in units so they know
a)
how much profit they will earn after they break even
b)
which products they should purchase for resale
c)
which costs are variable and which are fixed
d)
how many products they must sell to break even
30.

How confident are you in identifying Fixed and Variable costs now?

a)

Extremely confident

b)

Confident

c)

Not very Confident

d)

I still don't get it at all

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