 |
| 1 | |
Which of the following statements about using the break-even formula to calculate the break-even point is false? Ignore income taxes. |
| | A) | Revenue plus fixed costs less variable costs equals profit. |
| | B) | Profit is calculated by adding variable costs to fixed costs and subtracting that total from revenue. |
| | C) | Profit is calculated as sales revenues minus total costs. |
| | D) | At break-even, the revenues are equal to the total costs. |
|
|
|
| 2 | |
If the selling price per unit is $100, the fixed costs are $40 000 and the variable cost ratio is 75% (unit variable cost ÷ unit sales price), the break-even point in dollars is: |
| | A) | $10 000 |
| | B) | $160 000 |
| | C) | $30 000 |
| | D) | $100 000 |
|
|
|
| 3 | |
After the level of sales volume in units exceeds the break-even point in units: |
| | A) | the total fixed costs increase |
| | B) | the contribution margin ratio increases |
| | C) | the total contribution margin exceeds the total fixed costs |
| | D) | the contribution margin per unit increases |
|
|
|
| 4 | |
If the selling price per unit is $50, the fixed costs are $10 000, the unit variable costs are $25 and the operating income is $20 000, the break-even point in dollars is: |
| | A) | $10 000 |
| | B) | $20 000 |
| | C) | $30 000 |
| | D) | $50 000 |
|
|
|
| 5 | |
Chris bakes chocolate cakes for sale in his bakery shop. He sells each cake for $10, the unit variable cost is $2.50 and the fixed costs per week are $750. The number of chocolate cakes he needs to sell each week to break even is: |
| | A) | 75 |
| | B) | 100 |
| | C) | 300 |
| | D) | 500 |
|
|
|
| 6 | |
Chris bakes chocolate cakes for sale in his bakery shop. He sells each cake for $10, the unit variable cost is $2.50 and the fixed costs per week are $750. Chris budgets to sell 400 chocolate cakes per week. His his margin of safety (in cakes per week) is: |
| | A) | 75 |
| | B) | 100 |
| | C) | 300 |
| | D) | 500 |
|
|
|
| 7 | |
Chris bakes chocolate cakes for sale in his bakery shop. He sells each cake for $10, the unit variable cost is $2.50 and the fixed costs per week are $750. Chris has decided that he requires a before-tax profit of $1500 per week. The number of chocolate cakes he needs to sell each week to achieve this is: |
| | A) | 75 |
| | B) | 100 |
| | C) | 300 |
| | D) | 500 |
|
|
|
| 8 | |
Chris bakes chocolate cakes for sale in his bakery shop. He sells each cake for $10, the unit variable cost is $2.50 and the fixed costs per week are $750. Chris has decided that he would have a great lifestyle if he could achieve an after-tax net profit of $1800 per week at a 40% tax rate. The number of chocolate cakes he needs to sell each week to make an after-tax net profit of $1800 per week is: |
| | A) | 75 |
| | B) | 100 |
| | C) | 300 |
| | D) | 500 |
|
|
|
| 9 | |
At the break-even point, fixed costs are always: |
| | A) | less than the total contribution margin |
| | B) | equal to the total contribution margin |
| | C) | equal to the total variable costs |
| | D) | equal to the total revenue |
|
|
|
| 10 | |
The margin of safety is greater than zero when: |
| | A) | the total fixed costs are greater than the variable costs |
| | B) | the total contribution margin is less than the total fixed costs |
| | C) | the sales volume is less than the break-even sales volume |
| | D) | the sales volume is greater than the break-even sales volume |
|
|
.