Question 1

Break-even point is not a good planning tool since the goal of business is to make a profit.

Accepted Answer

A) True 
 B)False

Question 2

What would be the expected monetary value for the following data using the probability method?
$$\begin{array} { c r } 
\text { Probability } & \text { Cash Inflows } \
\hline 0.20 & \$ 100000 \
0.30 & \$ 80000 \
0.15 & \$ 60000 \
0.35 & \$ 0
\end{array}$$

Accepted Answer

A) $94 000 
B) $30 000 
C) $53 000 
D) $20 000 
A) $94 000 
B) $30 000 
C) $53 000 
D) $20 000

Question 3

Contribution margin = revenue less cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 4

If the selling price per unit is $20 and the contribution margin percentage is 30%,then the variable cost per unit must be $6.

Accepted Answer

A) True 
 B)False

Question 5

Answer the following questions using the information below:
The following information is for Mt.Panorama Company:
 $\begin{array}{lr}
\text { Selling price } & \$ 300 \text { per unit } \
\text { Variable costs } & \$ 180 \text { per unit } \
\text { Total fixed costs } & \$ 500000
\end{array}$
-The number of units that Mt.Panorama Company must sell to reach targeted operating profit of $180 000 is:

Accepted Answer

A) 3334 units. 
B) 5667 units. 
C) 5000 units. 
D) 4334 units. 
A) 3334 units. 
B) 5667 units. 
C) 5000 units. 
D) 4334 units.

Question 6

Margin of safety measures the difference between budgeted revenues and break-even revenues.

Accepted Answer

A) True 
 B)False

Question 7

Answer the following questions using the information below:
Gundagai Company sells several products.Information of average revenue and costs is as follows:
 $\begin{array}{lr}
\text { Selling price per unit } & \$ 28.50 \
\text { Variable costs per unit: } & \
\quad \text { Direct material } & \$ 5.25 \
\text { Direct manufacturing labour } & \$ 1.15 \
\text { Manufacturing overhead } & \$ 0.25 \
\quad \text { Selling costs } & \$ 1.85 \
\text { Annual fixed costs } & \$ 110000
\end{array}$
-The contribution margin per unit is:

Accepted Answer

A) $15. 
B) $20. 
C) $22. 
D) $125. 
A) $15. 
B) $20. 
C) $22. 
D) $125.

Question 8

Which one of the following is not a requirement for calculating the absorption costing break-even point?

Accepted Answer

A) Variable operating costs 
B) Fixed manufacturing costs 
C) Unit level of production 
D) Contribution margin per unit 
A) Variable operating costs 
B) Fixed manufacturing costs 
C) Unit level of production 
D) Contribution margin per unit

Question 9

To achieve $100 000 in operating profit,sales must total:

Accepted Answer

A) $130 000. 
B) $440 000. 
C) $160 000. 
D) None of these answers are correct. 
A) $130 000. 
B) $440 000. 
C) $160 000. 
D) None of these answers are correct.

Question 10

Answer the following questions using the information below:
Kelly's Armoured Suits sells a single product.10 000 units were sold resulting in $100 000 of sales revenue,$40 000 of variable costs,and $12 000 of fixed costs.
-The number of units that must be sold to achieve $60 000 of operating profit is:

Accepted Answer

A) 10 000 units. 
B) 11 666 units. 
C) 12 000 units. 
D) None of these answers are correct. 
A) 10 000 units. 
B) 11 666 units. 
C) 12 000 units. 
D) None of these answers are correct.

Question 11

Many companies find even the simplest CVP analysis helps with strategic and long-range planning.

Accepted Answer

A) True 
 B)False

Break-even point is not a good planning tool since the goal of business is to make a profit.

What would be the expected monetary value for the following data using the probability method? Probability Cash Inflows 0.20 \ 100000 0.30 \ 80000 0.15 \ 60000 0.35 \ 0

Contribution margin = revenue less cost of goods sold.

If the selling price per unit is $20 and the contribution margin percentage is 30%,then the variable cost per unit must be $6.

Margin of safety measures the difference between budgeted revenues and break-even revenues.

Which one of the following is not a requirement for calculating the absorption costing break-even point?

To achieve $100 000 in operating profit,sales must total:

Many companies find even the simplest CVP analysis helps with strategic and long-range planning.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

Filters

Exam 4: Costvolumeprofit Analysis

Break-even point is not a good planning tool since the goal of business is to make a profit.

What would be the expected monetary value for the following data using the probability method? Probability Cash Inflows 0.20 \ 100000 0.30 \ 80000 0.15 \ 60000 0.35 \ 0

Contribution margin = revenue less cost of goods sold.

If the selling price per unit is $20 and the contribution margin percentage is 30%,then the variable cost per unit must be $6.

Margin of safety measures the difference between budgeted revenues and break-even revenues.

Which one of the following is not a requirement for calculating the absorption costing break-even point?

To achieve $100 000 in operating profit,sales must total:

Many companies find even the simplest CVP analysis helps with strategic and long-range planning.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

Filters