Question

1. What is another term for the cost-volume-profit analysis?

   • ratio analysis
   • liquidity analysis
   • trend analysis
   • breakeven analysis

2. The cost-volume-profit analysis is a ________________ tool, something used by those internal to an organization for budgeting, planning, and decision-making purposes.

   • revenue
   • managerial accounting
   • liquidity
   • traditional financial accounting

3. Sales commission is an example of a fixed cost.

   • True
   • False

4. Utilities are an example of ___________ costs.

   • mixed
   • fixed
   • variable
   • All of the above.

5. Revenues – total variable costs – total fixed costs = _______________.

   • market value
   • selling price
   • profit or loss
   • efficiency

6. The denominator in the breakeven formula – average sales price minus average variable cost – is known as the _________________.

   • current ratio
   • unit contribution margin
   • return on investment
   • accounts payable turnover ratio

7. Some products or services have what is known as ______________ in economics, where demand does not change much in response to increases in prices.

   • price inelasticity
   • price elasticity
   • price character
   • commodity price

Answer 1

Question ÷What is another term for the cost-volume-profit analysis?

• ratio analysis
• liquidity analysis
• trend analysis
• breakeven analysis

Answer is Break even analysis

CVP helps to determine break even point for different sales volume and cost structure.

Question ÷ The cost-volume-profit analysis is a ________________ tool, something used by those internal to an organization for budgeting, planning, and decision-making purposes.

• revenue
• managerial accounting
• liquidity
• traditional financial accounting

Answer is Managerial accounting

Question ÷Sales commission is an example of a fixed cost.

• True
• False

Answer is False

Sales commission is a variable cost as sales commission is paid only when the products are sold. It varies with sales.

Question ÷Utilities are an example of ___________ costs.

• mixed
• fixed
• variable
• All of the above.

Answer is .Utilities is a mixed cost

Because utilities usage vary from company to company

For example a production company uses more electricity than the trading company.

Upto certain level the utilities is a fixed cost but afterwards it varies with the level of production.

Question ÷Revenues – total variable costs – total fixed costs = _______________.

• market value
• selling price
• profit or loss
• efficiency

Answer is profit and loss

Question ÷ The denominator in the breakeven formula – average sales price minus average variable cost – is known as the _________________.

• current ratio
• unit contribution margin
• return on investment
• accounts payable turnover ratio

Answer is unit contribution margin

Question÷ Some products or services have what is known as ______________ in economics, where demand does not change much in response to increases in prices.

• price inelasticity
• price elasticity
• price character
• commodity price

Answer is price inelasticity

price inelasticity means change in the price does not effect much changes in the demand of the consumers.