Reference no: EM132589844

Question 1. What is the underlying assumption for cost-volume-profit analysis?

A. Revenues and costs behave in a linear manner

B. Costs can be categorized as variable, fixed, or semi-variable

C. Worker efficiency and productivity remain constant

D. All of these are assumptions that underlie cost-volume-profit analysis

Question 2. The contribution margin per unit increases due to:

A. increase in selling price

B. decrease in selling price

C. increase in variable costs

D. decrease in fixed costs

Question 3. Peter Furniture has fixed costs of RM10, 000 and contribution margin per unit of RM24. Which of the following statement is (are) TRUE?

A. Each unit contributes RM24 toward covering the fixed costs of RM10, 000

B. The situation described is not possible and there must be an error

C. Once the break-even point is reached, the company will make money at the rate of RM24 per unit

D. Statements A and C are true

Question 4. At a volume level of 500,000 units, Laici Tin Co reported the following information:

Sales price RM60

Variable cost per unit RM20

Fixed cost per unit RM4

The company's contribution-margin ratio is:

A. 0.33

B. 0.40

C. 0.60

D. 0.67

Question 5. Zredic Co's presents the following figures for the first quarter budget:

Sales revenue RM840, 000

Contribution margin RM504, 000

Net income RM54, 000

If the company's break-even sales total RM750,000, Zredic Co's safety margin would be:

A. (RM90,000)

B. RM90,000

C. RM246,000

D. RM336,000

Question 6. A company that desires to lower its break-even point should strive to:

A. sell more units

B. increase fixed costs

C. decrease selling prices

D. reduce variable costs

Question 7. If a company desires to increase its safety margin, it should:

A. increase fixed costs

B. stimulate sales volume

C. decrease selling prices

D. decrease the contribution margin

Question 8. If Zarra Sdn Bhd's fixed costs are RM285, 000, the sales price per unit is RM80 per unit, and the variable cost per unit is RM20, calculate the break-even point (in RM).

A. RM380,000

B. RM95,000

C. RM14,250

D. RM4,750

Question 9. Kucai Bhd has fixed costs of RM200, 000 and variable costs are 30% of sales. If the company desires net income of RM10, 000, what would be the required sales?

A. RM700,000

B. RM525,000

C. RM350,000

D. RM300,000

Question 10. CVP analysis DOES NOT consider:

A. level of activity

B. variable cost per unit

C. fixed cost per unit

D. sales mix