Q#1 A company manufactures a single product with a variable cost per unit of £22.

The
contribution to sales ratio is 45%. Monthly fixed costs are £198,000.
What is the breakeven point (in units)?
A 4,950
B 9,000
C 11,000
D 20,000
Q#2 The level of sales at which revenues equal expenses and net income is zero is called
the:

A. margin of safety
B. contribution margin
C. break-even point
D marginal income point
Q #3 An organization manufactures a single product which is sold for $80 per unit. The
organization’s total monthly fixed Costs are $99,000 and it has a contribution to sales
ratio of 45%. This month it plans to manufacture and sell 4,000 UNITS
What is the organization’s margin of safety this month (in units)?
A 1,250
B 1,750
C 2,250
D 2,750
Q #4 If the sales price per unit is $100, the unit variable cost is $75, and total fixed costs
are $150,000,
then the break-even volume in dollar sales rounded to the nearest whole dollar is:

A. $600,000
B. $150,000
C. $200,000
D. $1,500
Q#5 The Zelma Company currently sells its product for $15 a unit. The variable cost per
unit is $8. Fixed costs are $59,500. Zelma has initiated a contract with its materials
supplier that will reduce direct materials $1 per unit. To the nearest unit, how many fewer
units will Zelma have to sell to achieve the break-even point?
A. 1,000 fewer units
B. 827 fewer units
C. 1,062 fewer units
D. 1,417 fewer units
Q #6 ABC sells deluxe car washes for $20 per customer. Variable costs are $5 per wash.
Fixed costs are $20,000 per month. What is ABC’s contribution margin?
A. $ 5
B. $15
C. $20
D. $25
Q#7 A company manufactures and sells a single product. The variable cost of the product
is £2·50 per unit and all production each month is sold at a price of £3·70 per unit. A
potential new customer has offered to buy 6,000 units per month at a price of £2·95 per
unit. The company has sufficient spare capacity to produce this quantity. If the new
business is accepted, sales to existing customers are expected to fall by two units for
every 15 units sold to the new customer.
What would be the overall increase in monthly profit which would result from accepting
the new business?
A £1,740
B £2,220
C £2,340
D £2,700
Q#8 A company manufactures one product which it sells for £40 per unit. The product
has a contribution to sales ratio of 40%. Monthly total fixed costs are £60,000. At the
planned level of activity for next month, the company has a margin of safety of £64,000
expressed in terms of sales value.
What is the planned activity level (in units) for next month?

A 3,100
B 4,100
C 5,350
D 7,750
Q#9Contribution margin” in costing terms is best described as the amount by which
ASales revenue exceeds all fixed costs
BSales revenue exceeds all fixed and variable costs
CSales revenue exceeds variable production costs
dD Sales revenue exceeds variable production and selling costs
.
Q#10 Four vertical lines have been labelled G, H, J and K at different
levels of activity on the following profit-volume chart:

Which line represents the total Sales at that level of activity?

A Line G
B Line H
C Line J
D Line K
Q#11 The following information is for Joshua Corporation:

Total fixed costs $333,500

Variable costs per unit $99
Selling price per unit $154

If total fixed costs increased to $394,850, then break-even volume in dollars

would increase by:

A 10.0%
B. 12.3%
C. 18.4%
D. 34.3%
Q#12 The contribution margin at the break-even point
A Equals total fixed costs.
B Is zero.
C Plus total fixed costs equals total revenues.
D Is greater than variable costs.
Q#13 The break-even point is
AThe volume of activity where all fixed costs are recovered.
BWhere fixed costs equal total variable costs.
CWhere total revenues equal total costs.
DWhere total costs equal total contribution margin.

Q#14 An organization manufactures and sells a single product. At the budgeted

level of output of 2,400 units per week, the unit cost and selling price structure is
as follows:
£ per unit £ per unit
Selling price 60
Less – variable production cost 15
Less – other variable cost 1 5
Less – fixed cost 30
–––
(50)
––
Profit 10
–––
What is the breakeven point (in units per week)?
A 1,200
B 1,600
C 1,800
D 2,400
Q# 15 The following information relates to a manufacturing company for next
period:

Units £
Production 14,000 Fixed production costs 63,000
Sales 12,000 Fixed selling costs 12,000
Using absorption costing the profit for next period has been calculated as
£36,000.
What would the profit for next period be using marginal costing?
A £25,000
B £27,000
C £45,000
D £47,000
Q#16 A company which uses marginal costing has a profit of £37,500 for a
period. Opening stock was 100 units and closing stock was 350 units.