Multiple Choice

1. Cost-volume-profit analysis assumes all of the following EXCEPT:

a. total variable costs remain the same over the relevant range

b. units manufactured equal units sold

c. all costs are variable or fixed

d. total fixed costs remain the same over the relevant range

2. Kaiser's Kraft Korner sells a single product. 7,000 units were sold resulting in $70,000 of sales revenue, $28,000 of variable costs, and $12,000 of fixed costs.

Contribution margin per unit is:

a. $4.00

b. $4.29

c. $6.00

d. None of these answers are correct.

3. Kaiser's Kraft Korner sells a single product. 7,000 units were sold resulting in $70,000 of sales revenue, $28,000 of variable costs, and $12,000 of fixed costs.

Breakeven point in units is:

a. 2,000 units

b. 3,000 units

c. 5,000 units

d. None of these answers are correct.

4. Kaiser's Kraft Korner sells a single product. 7,000 units were sold resulting in $70,000 of sales revenue, $28,000 of variable costs, and $12,000 of fixed costs.

The number of units that must be sold to achieve $60,000 of operating income is:

a. 10,000 units

b. 11,666 units

c. 12,000 units

d. None of these answers are correct.

5. Kaiser's Kraft Korner sells a single product. 7,000 units were sold resulting in $70,000 of sales revenue, $28,000 of variable costs, and $12,000 of fixed costs.

If sales increase by $25,000, operating income will increase by:

a. $10,000

b. $15,000

c. $22,200

d. None of these answers are correct.

6. Breakeven point is:

a. total costs divided by variable costs per unit

b. fixed costs divided by contribution margin per unit

c. contribution margin per unit divided by revenue per unit

d. the sum of fixed and variable costs divided by contribution margin per unit

Solution Summary

The solution explains some multiple choice questions relating to cost volume profit analysis