BSNS115 Exam Test Questions and All
Correct Answers.
What are the fundamental principles in the accounting code of ethics? - Answer Integrity,
objectivity and independence, competence, quality performance, professional behavior
What is the formula for total cost? - Answer fixed cost + variable cost
What is the name for costs that are partly fixed and partly variable? - Answer semi-variable
or mixed costs
What are some typical variable costs? - Answer Raw materials, Direct Labour (wages), factory
water, light, electricity, sales commissions, delivery costs
What are some typical fixed costs? - Answer Land tax, insurance, supervisory salaries,
depreciation, advertising
What are the two assumptions regarding cost behaviour? - Answer Relevant range, linearity
What is the relevant range? - Answer The level of activity over which a particular cost
behaviour pattern exists
What is the contribution margin formula? - Answer Selling Price - Variable cost
What is the contribution margin? - Answer 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? - Answer Contribution margin/sales
What is the contribution margin ratio? - Answer 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? - Answer Determine activity level required to cover all costs
associated with the business
What else can break even analysis be used for? - Answer Assess activity level required to
achieve profit targets. Assess margin of safety.
, Margin of safety - Answer difference between break even activity and output provides
indication of risks involved
Formula for breakeven point in units - Answer fixed costs/ contribution margin per unit
Formula for breakeven point in dollars - Answer Fixed costs/ contribution margin ratio (%)
OR
BE (units) x Sales price per unit
Formula for break even point plus desired profit in units - Answer Fixed costs + desired
profit / contribution margin per unit
Formula for break-even point plus desired profit in dollars - Answer Fixed costs + desired
profit / contribution margin ratio (%)
OR
BE plus desired profit (units) x sales price per unit
What are the weaknesses of break-even analysis? - Answer - Non-linear relationships
- Stepped fixed costs
- Multi-product businesses
What is the mission of the Inland Revenue? - Answer Contribute to the economic and social
wellbeing of New Zealand by collecting and distributing money
Why is tax from the Inland Revenue good? - Answer The money collected helps pay for
services that all New Zealanders benefit from, including healthcare, education, justice, housing
and roads.
What is the main expected expenditure for the Inland Revenue? - Answer Social security and
welfare
Where does the majority of tax revenue come from (Inland Revenue)? - Answer Individual
income tax, followed by GST, corporate income tax and other.
How is the inland revenue transforming? - Answer Simplifying policy and legislative settings,
making more intelligent use of information to proactively ensure customers get it right from the
start, fitting revenue processes seamlessly into people's lives, creating an organisation that
Correct Answers.
What are the fundamental principles in the accounting code of ethics? - Answer Integrity,
objectivity and independence, competence, quality performance, professional behavior
What is the formula for total cost? - Answer fixed cost + variable cost
What is the name for costs that are partly fixed and partly variable? - Answer semi-variable
or mixed costs
What are some typical variable costs? - Answer Raw materials, Direct Labour (wages), factory
water, light, electricity, sales commissions, delivery costs
What are some typical fixed costs? - Answer Land tax, insurance, supervisory salaries,
depreciation, advertising
What are the two assumptions regarding cost behaviour? - Answer Relevant range, linearity
What is the relevant range? - Answer The level of activity over which a particular cost
behaviour pattern exists
What is the contribution margin formula? - Answer Selling Price - Variable cost
What is the contribution margin? - Answer 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? - Answer Contribution margin/sales
What is the contribution margin ratio? - Answer 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? - Answer Determine activity level required to cover all costs
associated with the business
What else can break even analysis be used for? - Answer Assess activity level required to
achieve profit targets. Assess margin of safety.
, Margin of safety - Answer difference between break even activity and output provides
indication of risks involved
Formula for breakeven point in units - Answer fixed costs/ contribution margin per unit
Formula for breakeven point in dollars - Answer Fixed costs/ contribution margin ratio (%)
OR
BE (units) x Sales price per unit
Formula for break even point plus desired profit in units - Answer Fixed costs + desired
profit / contribution margin per unit
Formula for break-even point plus desired profit in dollars - Answer Fixed costs + desired
profit / contribution margin ratio (%)
OR
BE plus desired profit (units) x sales price per unit
What are the weaknesses of break-even analysis? - Answer - Non-linear relationships
- Stepped fixed costs
- Multi-product businesses
What is the mission of the Inland Revenue? - Answer Contribute to the economic and social
wellbeing of New Zealand by collecting and distributing money
Why is tax from the Inland Revenue good? - Answer The money collected helps pay for
services that all New Zealanders benefit from, including healthcare, education, justice, housing
and roads.
What is the main expected expenditure for the Inland Revenue? - Answer Social security and
welfare
Where does the majority of tax revenue come from (Inland Revenue)? - Answer Individual
income tax, followed by GST, corporate income tax and other.
How is the inland revenue transforming? - Answer Simplifying policy and legislative settings,
making more intelligent use of information to proactively ensure customers get it right from the
start, fitting revenue processes seamlessly into people's lives, creating an organisation that
