Cost Volume Profit Analysis MCQs

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MCQs 1-10

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1. Break-even analysis is also called?

(a) Business Analysis

(b) Unit sales

(d) None of the above

Correct! Wrong!

2. Break even capacity----------------------?

(a) Breakeven sales in dollar/Normal sales in dollar

(b) Normal sales in dollar/ Break even sales in dollar

(d) None of above

Correct! Wrong!

3. Estimate sales in amount is____________________?

(a) FC+ Profit/Contribution margin per unit

(b) FC+ Profit/Contribution margin Ratio

(d) VC+ Profit/Contribution margin Ratio

Correct! Wrong!

4. To find the break-even in dollars, you have to divide the fixed cost by ____________?

(a) Variable cost

(b) Contribution Margin per unit

(d) Contribution Margin ratio

Correct! Wrong!

5. The break-even point can be defined as?

(a) The level of activity at which there is neither profit nor loss

(b) The level of activity where cash flow is zero

(d) The level of activity where variable costs are covered by sales revenue

Correct! Wrong!

6. The break-even point in units is represented by the equation?

(a) Fixed costs / Variable costs

(b) Fixed costs / selling price per unit

(d) Fixed costs / Contribution per unit

Correct! Wrong!

7. If actual units produced are lower than the budgeted level of production which of the following types of cost would you expect to be lower than the budget?

(a) Variable costs per unit

(b) Total variable costs

(d) None

Correct! Wrong!

8. Costs that do not change when the activity base fluctuates are known as?

(a) Variable costs

(b) Discretionary costs

(d) Mixed costs

Correct! Wrong!

9. A company's telephone bill consisting of a Rs. 200 monthly base amount, plus long distance charges, would be classified as a?

(a) Variable cost

(b) Committed fixed cost

(b) Discretionary fixed cost

(d) Mixed cost

Correct! Wrong!

10. A company has fixed costs of Rs. 50,000 and variable costs per unit of output of Rs. 8. If its sole product sells for Rs. 18, what is the break-even quantity of output?

(a) Rs. 2,500

(b) Rs. 5,000

(d) Rs. 7,500

Correct! Wrong!

>> Practice Cost Volume Profit Analysis MCQs

MCQs 11-20

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11. Fixed cost per unit increases when?

(a) Production volume decreases

(b) Production volume increases

(d) None of the above

Correct! Wrong!

12. Contribution margin is also known as____________?

(a) Marginal income

(b) Gross profit

(d) None of the above

Correct! Wrong!

13. Contribution margin is the difference between sales and____________?

(a) Variable cost

(b) Fixed cost

(d) Revenue

Correct! Wrong!

14. An increase in variable costs?

(a) Increases P/V ratio

(b) Reduces the contribution margin

(d) None of above

Correct! Wrong!

15. Those cost that have both fixed and variable element are called________________?

(a) Variable cost

(b) Total fixed cost

(d) Prime cost

Correct! Wrong!

16. Following are the uses of CVP analysis except?

(a) Estimating future profits

(b) Deciding on selling price for a product

(d) Analyze cash flows

Correct! Wrong!

17. Which of the following costs would decrease if production levels were increase within the relevant range?

(a) Total fixed costs

(b) Variable costs per unit

(d) Fixed costs per unit

Correct! Wrong!

18. The indicator that results in total revenues being equal to total cost is called the?

(a) Break-even point

(b) Marginal cost

(d) Marginal volume

Correct! Wrong!

19. An example of a semi variable cost would be?

(a) The costs of insuring assets

(b) Electricity costs

(d) The costs of material to be used for production

Correct! Wrong!

20. Which of the following statements hold true for safety stock?

(a) The higher the profit margin per unit, the lower the safety stock necessary

(b) The lower the opportunity cost of the funds invested in inventory, the smaller the safety stock needed

(d) The greater the uncertainty associated with forecasted demand, the lower the level of safety stock needed

Correct! Wrong!

>>Practice Cost Volume Profit Analysis Problems and Solutions

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Multiple Product Break Even Analysis

Functional Budgets

Functional Budgets MCQs

Functional Budgets Problems

Job Order Costing

References

Cost Accounting For Dummies – By Kenneth W. Boyd

Fundamentals Of Cost Accounting – By William Lanen, Shannon Anderson Et.Al

Cost Accounting Fundamentals – By Steven M. Bragg

Cost Accounting Made Simple – By Mike Piper

Principles Of Cost Accounting – By Maria R. Mitchell

Fundamentals Of Cost Accounting 5^th Edition – By William Lanen, Shannon Anderson, And Michael Maher

Cost Volume Profit Analysis MCQs

MCQs 1-10

Click The Option and See Result

1. Break-even analysis is also called?

2. Break even capacity----------------------?

3. Estimate sales in amount is____________________?

4. To find the break-even in dollars, you have to divide the fixed cost by ____________?

5. The break-even point can be defined as?

6. The break-even point in units is represented by the equation?

7. If actual units produced are lower than the budgeted level of production which of the following types of cost would you expect to be lower than the budget?

8. Costs that do not change when the activity base fluctuates are known as?

9. A company's telephone bill consisting of a Rs. 200 monthly base amount, plus long distance charges, would be classified as a?

10. A company has fixed costs of Rs. 50,000 and variable costs per unit of output of Rs. 8. If its sole product sells for Rs. 18, what is the break-even quantity of output?

MCQs 11-20

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11. Fixed cost per unit increases when?

12. Contribution margin is also known as____________?

13. Contribution margin is the difference between sales and____________?

14. An increase in variable costs?

15. Those cost that have both fixed and variable element are called________________?

16. Following are the uses of CVP analysis except?

17. Which of the following costs would decrease if production levels were increase within the relevant range?

18. The indicator that results in total revenues being equal to total cost is called the?

19. An example of a semi variable cost would be?

20. Which of the following statements hold true for safety stock?

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