Matching Quiz

Match the terms listed below, with the appropriate desciption from the list on the right.


1				Break-even point


2				Composite unit


3				Contribution margin per unit


4				Contribution margin ratio


5				Cost-volume-profit analysis


6				Cost-volume-profit chart


7				Curvilinear cost


8				Estimated line of cost behaviour


9				Fixed cost


10				High-low method


11				Least-squares regression


12				Margin of safety


13				Mixed cost


14				Relevant range of operation


15				Sales mix


16				Scatter diagram


17				Step-wise cost


18				Variable cost

Answer choices for questions 1 through 18

A)	A specific number of units of each product in proportion to the expected sales mix. Multi-product CVP analysis treats this composite unit like a single product.
B)	A cost that changes in proportion to changes in activity volume.
C)	The excess of expected sales over break-even sales.
D)	A cost that acts like a combination of a fixed and a variable cost.
E)	A graph used to display data about past cost behaviours and volumes for each period as points on a diagram.
F)	A graphic representation of the cost-volume-profit relationships.
G)	The unique sales level at which a company neither earns a profit nor incurs a loss.
H)	The contribution margin per unit expressed as a percentage of the product’s selling price.
I)	The first step in the planning phase is predicting the volume of activity, the costs to be incurred, revenues to be received, and profits to be earned.
J)	A cost that remains unchanged in total amount regardless of changes in output volume within a relevant range.
K)	A method for drawing an estimated line of cost behaviour which uses cost data corresponding to the high and low sales volumes.
L)	A business’ normal operating range; excludes extremely high and low volumes that are not likely to be encountered.
M)	The ratio of the volumes of the various products sold by a company.
N)	A cost that changes with volume but not at a constant rate like pure variable costs.
O)	A statistical method for deriving an estimated line of cost behaviour that is more precise than the high-low method.
P)	A cost that remains fixed over limited ranges of volumes but increases by a lump sum when volume increases beyond maximum amounts.
Q)	The amount that the sale of one unit contributes toward recovering fixed costs and profit.
R)	A line on a scatter diagram drawn to identify the historical relationship between cost and sales volume.

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