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    Quez

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    Kent Jerome Salem Panubagan
    The document contains 5 multiple choice questions about contribution margin and break even analysis. Contribution margin is sales minus variable expenses (Question 2). It is used by internal management to evaluate performance (Question 4). Break even point occurs when revenue equals variable expenses plus fixed expenses (Question 5). The questions provide information about sales, costs, units, and ask the learner to calculate metrics like contribution margin, break even point, margin of safety based on the data.

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    Quez

    Uploaded by

    Kent Jerome Salem Panubagan
    614 views15 pages
    The document contains 5 multiple choice questions about contribution margin and break even analysis. Contribution margin is sales minus variable expenses (Question 2). It is used by internal management to evaluate performance (Question 4). Break even point occurs when revenue equals variable expenses plus fixed expenses (Question 5). The questions provide information about sales, costs, units, and ask the learner to calculate metrics like contribution margin, break even point, margin of safety based on the data.

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    The document contains 5 multiple choice questions about contribution margin and break even analysis. Contribution margin is sales minus variable expenses (Question 2). It is used by internal management to evaluate performance (Question 4). Break even point occurs when revenue equals variable expenses plus fixed expenses (Question 5). The questions provide information about sales, costs, units, and ask the learner to calculate metrics like contribution margin, break even point, margin of safety based on the data.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    614 views15 pages

    Quez

    Uploaded by

    Kent Jerome Salem Panubagan
    The document contains 5 multiple choice questions about contribution margin and break even analysis. Contribution margin is sales minus variable expenses (Question 2). It is used by internal management to evaluate performance (Question 4). Break even point occurs when revenue equals variable expenses plus fixed expenses (Question 5). The questions provide information about sales, costs, units, and ask the learner to calculate metrics like contribution margin, break even point, margin of safety based on the data.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 15

    EASY ROUND

    QUESTION 1

    The amount by which an item contributes towards covering fixed cost and providing for profit is
    known as

    A. Gross Profit
    B. Gross Margin
    C. Contribution Margin
    D. Net Margin
    Question 2

    Contribution Margin is:

    A. Sales-Fixed Expenses
    B. Sales-Selling Expenses
    C. Net income – Selling Expenses
    D. Net income + Fixed Cost
    Question 3:

    Consider the following information:


    Sales revenue: 12,000
    Variable manufacturing expenses: 3,000
    Variable marketing and admin. expenses: 1,000
    Fixed manufacturing expenses: 1,500
    Fixed marketing and admin. expenses: 500
    Based on the above information, the contribution margin is:

    A. 9,000
    B. 8,000
    C. 10,500
    D. 10,000
    Question 4:

    A contribution margin income statement is usually used by:

    A. Tax agencies and banks


    B. Customers and suppliers
    C. Creditors and investors
    D. Internal management
    • Revenue < Variable expenses + Fixed expenses

    Question 5:

    Which of the following is correct about break even point of a company?

    A. Revenue > Variable expenses + Fixed expenses


    B. Revenue < Variable expenses + Fixed expenses
    C. Revenue = Variable expenses + Fixed expenses
    D. None of the above
    Average Round

    Question 1

    Which of the following statements is correct about variable costs?


    A. Variable costs vary on per unit basis but remain the same in total as the level of activity
    changes
    B. Variable costs vary on per unit basis as the level of activity changes
    C. Variable costs vary in total in direct proportion to changes in the level of activity
    D. Variable costs remain the same in total as the level of activity changes
    Question 2

    Which of the following is a correct formula to calculate


    contribution margin ratio (CM ratio)?

    A. Contribution Margin/Sales
    B. Contribution margin/Variable cost
    C. Contribution margin/Fixed cost
    D. Sales/Contribution margin
    Question 3

    If the selling price is $32 per unit, the variable cost is $24 per unit, and total fixed
    cost is $320,000, what will be the break even point in units?

    A. 10,000 units
    B. 13,333 units
    C. 40,000 units
    D. 5,714 units
    Question 4

    The US Company sells product X. Some selected data is given


    below:
    Selling price per unit of product X: $16
    Variable cost per unit of product X: $12
    Total fixed cost: $160,000
    Based on the above information, how many units of product X
    would be required to sell to earn an operating profit of $20,000?

    A. 11,250 units
    B. 20,000 units
    C. 45,000 units
    D. 15,000 units
    Question 5

    If total fixed cost is $8,000 and break even point is


    4,000 units, the contribution margin per unit will
    be:

    A. 0.5
    B. 50
    C. 20
    D. 2
    DIFFICULT ROUND

    QUESTION 1

    If contribution margin percentage is 25% and contribution margin


    per unit is $500, the selling price per unit will be:

    A. 1,250
    B. 125
    C. 2,000
    D. 1,500
    Question 2

    If actual sales are $25,000, break even point in dollars is $15,000, and
    variable cost is $12,000, the margin of safety will be:

    A. 10,000
    B. 40,000
    C. 13,000
    D. 27,000
    Question 3

    Suppose that you have the following information


    Sales 100,000
    Distribution Cost 20,000
    Depreciation Expense 55,000
    Rent Expense 10,200
    Packaging Cost 50,000

    How much is the contribution margin?

    30,000
    Question 4

    Given the following data

    Cash balance, beginning 50,000


    Net Income 10,000
    Gain on sale of Equipment 3,000
    Proceeds from sale of equipment150,000
    Depreciation Expense 30,000
    Issuance of Shares 150,000
    Sale of investment in bonds 75,000

    Compute the ending balance of cash.

    462,000
    Question 5:
    Balance Sheet summary
    2017 2018
    Cash 30,000 41,000
    Accounts Receivable 50,000 70,000
    Inventory 42,000 35,000
    Prepaid Insurance 10,000 26,000
    Accounts Payable 15,000 7,300

    Income Statement Summary


    Sales 780,000
    Cost of Sales 425,000
    Gross Profit 355,000
    Expenses 150,000
    Net Income 205,000

    How much is the net cash provided/used in operating activities?


    168,300

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