Reference no: EM132156277

Question -

1. Which of the following is a false statement regarding assumptions of CVP analysis?

a. Total fixed costs remain constant over the relevant range.

b. Unit selling prices are constant.

c. Changes in volume or level of activity increase variable costs per unit.

d. All units produced are sold.

2. Mixed costs may be separated into fixed costs and variable costs by using

a. the relevant range method.

b. the high-low method.

c. the contribution margin method.

d. all of the above.

3. If the unit selling price is $500, the unit variable cost is $300, and the total monthly fixed costs are $300,000, then the contribution margin ratio is

a. 30%.

b. 40%.

c. 50%.

d. 60%.

4. If activity level increases 25% and a specific cost increases from $40,000 to $50,000, this cost would be classified as a

a. variable cost.

b. mixed cost.

c. fixed cost.

d. none of the above.

5. If total fixed costs are $900,000 and variable costs as a percentage of unit selling price are 40%, then the break-even point in dollars is

a. $1,500,000.

b. $360,000.

c. $2,250,000.

d. not determinable with the information given.