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- 1. Multiple Choice
To which function of management is CVP analysis most applicable?
Planning
Organizing
Directing
Controlling
- 2. Multiple Choice
The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed:
contribution margin analysis
cost-volume-profit analysis
budgetary analysis
gross profit analysis
- 3. Multiple Choice
The term contribution margin is best defined as the:
difference between fixed costs and variable costs.
difference between revenue and fixed costs.
amount available to cover fixed costs and profit.
amount available to cover variable costs.
- 4. Multiple Choice
Cost-volume-profit analysis allows management to determine the relative profitability of a product by
Highlighting potential bottlenecks in the production process.
Determining the contribution margin per unit and projected profits at various levels of production.
Assigning costs to a product in a manner that maximizes the contribution margin.
Keeping fixed costs to an absolute minimum.
- 5. Multiple Choice
Cost-volume-profit analysis cannot be used if which of the following occurs?
Costs cannot be properly classified into fixed and variable costs.
The per unit variable costs change.
The total fixed costs change.
Per unit sales prices change.
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