BSNS 115 Exam Questions And Correct
Answers, 100%
What are the fundamental principles in the accounting code of ethics?
Integrity, objectivity and independence, competence, quality performance, professional
behaviour
What is the formula for total cost?
fixed cost + variable cost
What is the name for costs that are partly fixed and partly variable?
semi-variable or mixed costs
What are some typical variable costs?
Raw materials, Direct Labour (wages), factory water, light, electricity, sales
commissions, delivery costs
What are some typical fixed costs?
Land tax, insurance, supervisory salaries, depreciation, advertising
What are the two assumptions regarding cost behaviour?
Relevant range, linearity
What is the relevant range?
The level of activity over which a particular cost behaviour pattern exists
What is the contribution margin formula?
Selling Price - Variable cost
What is the contribution margin?
The contribution to fixed costs and operating income from the sale of a product or
provision of a service
What is the contribution margin ratio formula?
Contribution margin/sales
What is the contribution margin ratio?
Portion of each sales dollar that remains after covering the variable costs and are
available to cover fixed costs or provide for profit.
What is break-even analysis?
Determine activity level required to cover all costs associated with the business
What else can break even analysis be used for?
Assess activity level required to achieve profit targets. Assess margin of safety.
Margin of safety
difference between break even activity and output provides indication of risks involved
Formula for breakeven point in units
fixed costs/ contribution margin per unit
Formula for breakeven point in dollars
Fixed costs/ contribution margin ratio (%)
OR
BE (units) x Sales price per unit
Formula for break even point plus desired profit in units
Fixed costs + desired profit / contribution margin per unit
Answers, 100%
What are the fundamental principles in the accounting code of ethics?
Integrity, objectivity and independence, competence, quality performance, professional
behaviour
What is the formula for total cost?
fixed cost + variable cost
What is the name for costs that are partly fixed and partly variable?
semi-variable or mixed costs
What are some typical variable costs?
Raw materials, Direct Labour (wages), factory water, light, electricity, sales
commissions, delivery costs
What are some typical fixed costs?
Land tax, insurance, supervisory salaries, depreciation, advertising
What are the two assumptions regarding cost behaviour?
Relevant range, linearity
What is the relevant range?
The level of activity over which a particular cost behaviour pattern exists
What is the contribution margin formula?
Selling Price - Variable cost
What is the contribution margin?
The contribution to fixed costs and operating income from the sale of a product or
provision of a service
What is the contribution margin ratio formula?
Contribution margin/sales
What is the contribution margin ratio?
Portion of each sales dollar that remains after covering the variable costs and are
available to cover fixed costs or provide for profit.
What is break-even analysis?
Determine activity level required to cover all costs associated with the business
What else can break even analysis be used for?
Assess activity level required to achieve profit targets. Assess margin of safety.
Margin of safety
difference between break even activity and output provides indication of risks involved
Formula for breakeven point in units
fixed costs/ contribution margin per unit
Formula for breakeven point in dollars
Fixed costs/ contribution margin ratio (%)
OR
BE (units) x Sales price per unit
Formula for break even point plus desired profit in units
Fixed costs + desired profit / contribution margin per unit
