Reference no: EM132514158

Question 1: The equation for the break-even point in sales units is

a.variable costs divided by unit contribution margin.

b.fixed costs multiplied by unit contribution margin.

c.fixed costs divided by unit contribution margin.

d.fixed costs divided by contribution margin ratio.

Question 2: All of the following are assumptions of cost-volume-profit analysis except

a.there is no change in inventory quantities during the period.

b.within the relevant range of operating activity, the efficiency of operations can change.

c.the sales mix is constant.

d.costs can be divided into fixed and variable components.

Question 3: Operating leverage is determined as

a.total sales minus total costs.

b.sales minus sales at break-even point divided by sales.

c.contribution margin divided by operating income.

d.fixed costs divided by unit contribution margin.

Question 4: Which of the following customers or activities could be used for break-even analysis for a company providing educational services?

a.Number of female instructors

b.Number of holidays per semester

c.Units of product sold

d.Number of students per course

Question 5: Break-even analysis for a service company involves identifying the correct measure of

a.overhead.

b.direct labor for the unit of analysis.

c.raw materials for the unit of analysis.

d.activity for the unit of analysis.

Question 6: Contribution margin ratio is also referred to as

a.price-earnings ratio.

b.current ratio.

c.profit-volume ratio.

d.debt-to-equity ratio.

Question 7: An example of a type of company with high fixed costs is a(n)

a.public accounting firm.

b.fast-food restaurant.

c.airline manufacturer.

d.retail shop.