WorksheetsCost-Volume-Profit Analysis Quiz
Total questions: 20
Worksheet time: 10mins
Fixed costs remain constant regardless of the volume of production.
True
False
The contribution margin is the amount left after deducting fixed costs.
True
False
Break-even point decreases if variable costs per unit decrease.
True
False
CVP analysis assumes which of the following?
Fixed costs change with production levels.
Selling price remains constant within the relevant range.
Variable costs per unit vary with production levels.
Total costs and total revenue curves are nonlinear.
Which of these statements about the break-even point is correct?
It occurs when total revenue equals total variable costs.
It is influenced by changes in fixed costs or selling price.
At this point, total contribution margin is zero.
It occurs at maximum sales volume.
If fixed costs are $25,000 and the contribution margin per unit is $5, what is the break-even point in units?
5,000
4,000
6,000
3,500
The sensitivity analysis in CVP focuses on:
Calculating fixed costs
Estimating tax implications
Assessing changes in volume, cost, or price
Preparing financial statements
If a product's selling price is $50, variable cost is $30, and fixed costs are $40,000, how many units must be sold to break even?
1,000
2,000
800
1,500
A company sells a product for $20 with a $5 variable cost per unit. If fixed costs are $15,000, what is the contribution margin ratio?
25%
75%
50%
20%
With a contribution margin of $10 and fixed costs of $50,000, how much profit is earned at a sales level of 6,000 units?
$10,000
$60,000
$50,000
$40,000
If variable costs increase from $15 to $20, what is the effect on the break-even point?
It increases
It decreases
It remains unchanged
It depends on fixed costs
A company reduces its fixed costs from $25,000 to $20,000. If the contribution margin is $5/unit, how much does the break-even point change?
Decrease by 1,000 units
Increase by 500 units
Decrease by 2,000 units
No change
Cost allocation is used only for fixed costs.
True
False
Direct costs are always allocated based on activity levels.
True
False
Allocating costs inaccurately can distort profitability analysis.
True
False
Which of the following is NOT an allocation base for overhead costs?
Machine Hours
Direct Labor Hours
Sales Revenue
Cash Flow
The method of allocation that assigns costs based on the use of resources is:
Direct Method
Activity-Based Costing (ABC)
Traditional Allocation
Incremental Allocation
If a department incurs $20,000 in utility costs and produces 2,000 units, what is the cost allocated per unit?
$10
$15
$20
$25
A company incurs total overhead of $100,000. It allocates costs using direct labor hours. If Department A used 4,000 hours out of a total 10,000 hours, how much overhead is allocated to Department A?
$40,000
$50,000
$60,000
$30,000
If an overhead cost pool is $30,000 and the activity base is 15,000 machine hours, what is the overhead rate per machine hour?
$2
$3
$4
$5
