Question 1

CVP analysis cannot be used in companies that sell multiple products.

Accepted Answer

A) True 
 B)False

Question 2

To express breakeven point in revenue the formula is:

Accepted Answer

A)  Fixed Costs per unit / Profit per unit. 
B)  Fixed Costs / Contribution Margin per unit. 
C)  Fixed Costs / Contribution Margin ratio. 
D)  Fixed Costs per unit / Contribution Margin ratio. 
A)  Fixed Costs per unit / Profit per unit. 
B)  Fixed Costs / Contribution Margin per unit. 
C)  Fixed Costs / Contribution Margin ratio. 
D)  Fixed Costs per unit / Contribution Margin ratio.

Question 3

The % change in profits can be calculated by % change in margin of safety multiplied by degree of operating leverage.

Accepted Answer

A) True 
 B)False

Question 4

Accountants typically perform CVP analysis every day to keep track of what is happening in the market place.

Accepted Answer

A) True 
 B)False

Question 5

Data extracted from the accounting information system of NYX Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x.   The point where the dashed line intersects the solid line is the:

Accepted Answer

A)  variable cost per unit. 
B)  fixed cost per unit. 
C)  unit contribution margin. 
D)  breakeven point. 
A)  variable cost per unit. 
B)  fixed cost per unit. 
C)  unit contribution margin. 
D)  breakeven point.

Question 6

Endeavour Ltd. is a management consulting firm specialising in pension plans. Its billing rate to clients is $120 per hour, and variable costs average $80 per hour. Fixed costs are $38,000 per month. The income tax rate is 20%. If variable costs increase by 20% and management increases its billing rate by 5%, what is the effect on the breakeven point, in billable hours?

Accepted Answer

A)  It increases the breakeven point. 
B)  It decreases the breakeven point. 
C)  The breakeven point will not change. 
D)  Cannot be determined. 
A)  It increases the breakeven point. 
B)  It decreases the breakeven point. 
C)  The breakeven point will not change. 
D)  Cannot be determined.

CVP analysis cannot be used in companies that sell multiple products.

To express breakeven point in revenue the formula is:

The % change in profits can be calculated by % change in margin of safety multiplied by degree of operating leverage.

Accountants typically perform CVP analysis every day to keep track of what is happening in the market place.

Data extracted from the accounting information system of NYX Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x. The point where the dashed line intersects the solid line is the:

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Planning Budgeting and Behaviour

Operational Budgets

Job and Process Costing Systems

Flexible Budgets, Standard Costs and Variance Analysis

Variance Analysis: Revenue and Cost

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters

Exam 4: Costvolumeprofit Cvp Analysis

CVP analysis cannot be used in companies that sell multiple products.

To express breakeven point in revenue the formula is:

The % change in profits can be calculated by % change in margin of safety multiplied by degree of operating leverage.

Accountants typically perform CVP analysis every day to keep track of what is happening in the market place.

Data extracted from the accounting information system of NYX Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x. The point where the dashed line intersects the solid line is the:

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Planning Budgeting and Behaviour

Operational Budgets

Job and Process Costing Systems

Flexible Budgets, Standard Costs and Variance Analysis

Variance Analysis: Revenue and Cost

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters