Question 1

Why may management justifiably hesitate to close a service:

Accepted Answer

A) because of emotional attachment to providing the service. 
B) because the loss made in providing one service can be compensated by the profit made by providing other services. 
C) because closing one service may lead to a decline in the demand of other services. 
D) all of the above. 
A) because of emotional attachment to providing the service. 
B) because the loss made in providing one service can be compensated by the profit made by providing other services. 
C) because closing one service may lead to a decline in the demand of other services. 
D) all of the above.

Question 2

How are fixed costs represented graphically?

Accepted Answer

A) a horizontal line, staying the same irrespective of the level of activity. 
B) starting at zero and increasing as a straight line as activity increases. 
C) starting at a given point and increasing as a straight line as activity increases. 
D) the intersection of the total costs and total revenue lines. 
A) a horizontal line, staying the same irrespective of the level of activity. 
B) starting at zero and increasing as a straight line as activity increases. 
C) starting at a given point and increasing as a straight line as activity increases. 
D) the intersection of the total costs and total revenue lines.

Question 3

Selling price per unit less variable costs per unit is known as:

Accepted Answer

A) contribution margin. 
B) direct cost. 
C) avoidable cost. 
D) all of the above. 
A) contribution margin. 
B) direct cost. 
C) avoidable cost. 
D) all of the above.

Question 4

The vertical axes on a break-even chart and a profit-volume chart respectively are:

Accepted Answer

A) profit: sales revenue and costs. 
B) volume of output: volume of output. 
C) sales revenue and costs: profit. 
D) fixed costs: sales revenue. 
A) profit: sales revenue and costs. 
B) volume of output: volume of output. 
C) sales revenue and costs: profit. 
D) fixed costs: sales revenue.

Question 5

Which of the following statements is correct?

Accepted Answer

A) contribution margin contributes to profits. 
B) contribution margin contributes to fixed costs. 
C) contribution margin contributes to variable costs. 
D) Both A and B. 
A) contribution margin contributes to profits. 
B) contribution margin contributes to fixed costs. 
C) contribution margin contributes to variable costs. 
D) Both A and B.

Question 6

The method that can be used to separate semi-variable costs into their fixed and variable components is

Accepted Answer

A) High-low method. 
B) The line of best fit. 
C) Linear regression method. 
D) All of the above methods. 
A) High-low method. 
B) The line of best fit. 
C) Linear regression method. 
D) All of the above methods.

Why may management justifiably hesitate to close a service:

How are fixed costs represented graphically?

Selling price per unit less variable costs per unit is known as:

The vertical axes on a break-even chart and a profit-volume chart respectively are:

Which of the following statements is correct?

The method that can be used to separate semi-variable costs into their fixed and variable components is

Introduction to Accounting

Measuring and Reporting Financial Position

Measuring and Reporting Financial Performance

Introduction to Limited Companies

Regulatory Framework for Companies

Measuring and Reporting Cash Flows

Corporate Social Responsibility and Sustainability Accounting

Analysis and Interpretation of Financial Statements

Full Costing

Budgeting

Capital Investment Decisions

The Management of Working Capital

Financing the Business

Filters

Exam 9: Cost-Volume-Profit Analysis and Relevant Costing

Why may management justifiably hesitate to close a service:

How are fixed costs represented graphically?

Selling price per unit less variable costs per unit is known as:

The vertical axes on a break-even chart and a profit-volume chart respectively are:

Which of the following statements is correct?

The method that can be used to separate semi-variable costs into their fixed and variable components is

Introduction to Accounting

Measuring and Reporting Financial Position

Measuring and Reporting Financial Performance

Introduction to Limited Companies

Regulatory Framework for Companies

Measuring and Reporting Cash Flows

Corporate Social Responsibility and Sustainability Accounting

Analysis and Interpretation of Financial Statements

Full Costing

Budgeting

Capital Investment Decisions

The Management of Working Capital

Financing the Business

Filters