WorksheetsProcess Operations and Maintenance Management 10
Total questions: 5
Worksheet time: 4mins
Name
Class
Date
1.
The margin of safety indicates
a)
How much sales can drop before a loss occurs
b)
The percentage of fixed costs covered by sales
c)
The portion of sales that is profit
2.
Which action will increase the margin of safety?
a)
Increasing fixed costs
b)
Reducing selling price per unit
c)
Increasing total sales
3.
When fixed costs increase, but the contribution margin per unit remains constant, the company must:
a)
Sell fewer units to break even
b)
Sell more units to break even
c)
Maintain the same sales level
4.
When a company increases its selling price per unit, assuming all else constant, the break-even point will:
a)
Increase
b)
Decrease
c)
Stay the same
5.
The contribution margin is calculated as:
a)
Sales – Fixed Costs
b)
Sales – Variable Costs
c)
Sales – Total Costs
100 %
