CVP-MULTIPLE CHOICE EXAM REVIEW
QUESTIONS AND ANSWERS; 100%
PASS GUARANTEED; GRADED A+
A company could never incur a loss that is greater than
a. total sales
b. total fixed costs
c. total costs
d. total contribution margin - correct answer- c.
total costs
A company has one product with a break even point of
50,000 units. Fixed costs are $200,000 and the product
sells for $10 each. What is the contribution margin ratio?
a. 10%
b. 20%
c. 40%
d. 50% - correct answer- c. 40%
,A company has variable costs of 60% of sales and wants to
increase advertising expenses by $50,000. If sales increase
by $100,000, how much will operating income change?
a. $10,000 increase
b. $90,000 decrease
c. $10,000 decrease
d. $40,000 decrease - correct answer- c.
$10,000 decrease
A company must monitor the sales mix when
a. one product accounts for 99% of sales
b. the company only has one product
c. the company has many products with different
contribution margins
d. the company has many products with the same
contribution margin - correct answer- c. the
company has many products with different contribution
margins
A company will be at break even when
, a. fixed cost equals contribution margin
b. revenues equal fixed cost and there are variable costs
c. revenues less variable costs equals fixed costs
d. either a. or c. - correct answer- d. either a. or
c.
A management team that prefers to have a low operating
leverage means that the company most likely
a. expects a strong increase in sales volume
b. expects a decrease in sales volume
c. is very unprofitable
d. has very high fixed costs - correct answer- b.
expects a decrease in sales volume
As the contribution margin percentage increases, the
sales dollars required to break even will
a. decrease
b. increase
c. remain the same
QUESTIONS AND ANSWERS; 100%
PASS GUARANTEED; GRADED A+
A company could never incur a loss that is greater than
a. total sales
b. total fixed costs
c. total costs
d. total contribution margin - correct answer- c.
total costs
A company has one product with a break even point of
50,000 units. Fixed costs are $200,000 and the product
sells for $10 each. What is the contribution margin ratio?
a. 10%
b. 20%
c. 40%
d. 50% - correct answer- c. 40%
,A company has variable costs of 60% of sales and wants to
increase advertising expenses by $50,000. If sales increase
by $100,000, how much will operating income change?
a. $10,000 increase
b. $90,000 decrease
c. $10,000 decrease
d. $40,000 decrease - correct answer- c.
$10,000 decrease
A company must monitor the sales mix when
a. one product accounts for 99% of sales
b. the company only has one product
c. the company has many products with different
contribution margins
d. the company has many products with the same
contribution margin - correct answer- c. the
company has many products with different contribution
margins
A company will be at break even when
, a. fixed cost equals contribution margin
b. revenues equal fixed cost and there are variable costs
c. revenues less variable costs equals fixed costs
d. either a. or c. - correct answer- d. either a. or
c.
A management team that prefers to have a low operating
leverage means that the company most likely
a. expects a strong increase in sales volume
b. expects a decrease in sales volume
c. is very unprofitable
d. has very high fixed costs - correct answer- b.
expects a decrease in sales volume
As the contribution margin percentage increases, the
sales dollars required to break even will
a. decrease
b. increase
c. remain the same
