Practice Test

Q1) Variable costing is also known as _______ Show Answer

Q2) Total Cost = Fixed Cost + _______ Show Answer

Q3) Any change in marginal costing affects to the ________ of the company. Show Answer

Q4) _______ is the excess of selling price over variable costs. Show Answer

Q5) Contribution = Fixed Cost + ________ Show Answer

Q6) When contribution is equal to Fixed cost it is termed as _______ Show Answer

Q7) Fixed cost does not have impact on _________. Show Answer

Q8) P/V Ratio is relationship between _______ and _______ Show Answer

Q9) At _______ stage contribution is equal to fixed cost. Show Answer

Q10) MOS = Profit/_______ Show Answer

Q11) ______ is the excess of contribution over fixed cost. Show Answer

Q12) Marginal costing is also known as: ________ Show Answer

Q13) ________ is relationship between contribution and sales. Show Answer

Q14) BEP (Rs.) is calculated by using the _________ formula. Show Answer

Q15) _______ is excess of actual sales over the break-even sales. Show Answer

Q16) If the selling price per unit is Rs. 20. Contribution per unit is Rs. 8 and Fixed cost are Rs. 1,20,000, the break-even points (in Nos) will be ________ Show Answer

Q17) R Ltd. Company has sales of Rs. 50,000, P/V Ratio is 30% and Fixed Cost is Rs. 10,000, the profit will be ________. Show Answer

Q18) If Profit is Rs. 40,000, P/V Ratio is 20% then MOS will be _________ Show Answer

Q19) If P/V Ratio is 40%, Sales are Rs. 2,00,000, then contribution will be _______ Show Answer

Q20) If P/V Ratio is 50% MOS is 40% and sales are Rs. 10,00,000 the Profit will be ________ Show Answer

Q21) When contribution equals to fixed cost the profit will be ________ Show Answer

Q22) Contribution costing is also known as marginal costing. Show Answer

Q23) Contribution means difference between selling price and total cost. Show Answer

Q24) Maximum contribution is considered as more profit. Show Answer

Q25) Contribution is more than Fixed cost is considered as Net Loss. Show Answer

Q26) Higher P/V Ratio indicates, Low profitability. Show Answer

Q27) P/V Ratio can be improved by increasing in sales, decreasing in variable cost. Show Answer

Q28) At BEP contribution is equal to Fixed Cost. Show Answer

Q29) At BEP contribution is equal to Total cost. Show Answer

Q30) MOS is referred as excess of sales over variable cost. Show Answer

Q31) Angle of incidence is the angle made by the sales line and total cost line at BEP. Show Answer

Q32) Semi-variable cost do not form part of marginal costing. Show Answer

Q33) An increase in sales price lowers the break-even point. Show Answer

Q34) A decrease in sales price increases the break-even point. Show Answer

Q35) If Margin of safety is 40% and P/V Ratio is 50% then profit percentage will be 20%. Show Answer

Q36) P/V Ratio can be increased by increasing selling price. Show Answer

Q37) A 15% increase in the variable cost per unit and same decrease (%) in fixed cost will reduce P/V Ratio. Show Answer

Q38) P/V Ratio can be increased by decreasing variable cost. Show Answer

Q39) At BEP Contribution is ________ Fixed Cost. Show Answer

Q40) At above BEP Contribution is ________ Fixed Cost. Show Answer

Q41) At below BEP Contribution is _______ Fixed Cost. Show Answer

Q42) P/V Ratio is 40% and its MOS is 50% work out the net profit and break-even point if sales volume is Rs. 8,00,000. Show Answer

Q43) From the following data, find out how many units should be sold to earn profit of 10% on sales. S.P Rs. 20, V.C. Rs. 14, Fixed cost Rs. 4,00,000 Show Answer

Q44) What distinguishes absorption costing from marginal costing? Show Answer

Q45) The Marginal Cost Statement Show Answer

Q46) CVP analysis requires costs to be categorized as Show Answer

Q48) Contribution is equal to Show Answer

Q49) Which of the following costs is not deducted from sales revenue in computation of contribution? Show Answer

Q50) The selling price per unit less the variable cost per unit is the Show Answer

Q51) If contribution margin increases by Rs. 2 per unit, then operating profits will Show Answer

Q52) P/V ratio is equal to Show Answer

Q53) Profit - volume ratio is improved by reducing Show Answer

Q54) At the break-even point, which equation will be true. Show Answer

Q55) The break even points in units is equal to Show Answer

Q56) When fixed cost increases, the break even point Show Answer

Q57) When variable cost decreases, then break even point Show Answer

Q58) When selling price decreases, then break even point Show Answer

Q59) When sales increases then break even point Show Answer

Q60) Which of the following can improve break-even point? Show Answer

Q61) Which of the following describes the margin of safety? Show Answer

Q62) Margin of safety is expressed as Show Answer

Q63) Under which of the following cases the margin of safety decreases? Show Answer

Q64) In the break-even chart, the margin of safety point lies Show Answer

Q65) Fixed cost is equal to Show Answer

Q66) Which of the following factors is to be multiplied with contribution margin ratio to calculate profit? Show Answer

Q67) In cost-volume-profit analysis, profit is equal to Show Answer

Q68) The sales volume in value required to earn the target profit, the formula is Show Answer

Q69) There is a reduction in the selling price. This will, other factors remaining same Show Answer

Q70) There is an increase in advertising expenses. This will, other factors remaining same Show Answer

Q71) Cost-volume-profit analysis is used PRIMARILY by management: Show Answer

Q72) The contribution to sales ratio of a company is 20% and profit is Rs. 64,500. If the total sales of the company are Rs. 7,80,000. the fixed cost is Show Answer

Q73) The total cost of manufacturing 4,000 units of a product is Rs. 4,50,000 which includes fixed costs of Rs. 2,50,000. If the company desires to produce 5,000 units, then the total cost will be Show Answer

Q74) The total cost of manufacturing 3,600 units of Product X is Rs. 81,000 which includes variable cost per unit of Rs. 15.00. If the company desires to produce 3,850 units, then the total cost would be Show Answer

Q75) P Limited incurs fixed costs of Rs. 1,00,000 per annum. The company manufactures a single product and sells it for Rs. 50 per unit. If the contribution to sales ratio is 40%, the break-even sales in units are Show Answer

Q76) A company manufactures a single product with a variable cost per unit of Rs. 22. The contribution to sales ratio is 45%. Monthly fixed costs are Rs. 1,98,000. What is the breakeven point in units? Show Answer

Q77) A Ltd. manufactures and sells product 'B'. The sale price per unit of the product is Rs. 35, The company will incur a loss of Rs. 5.00 per unit if it sells 4,000 units; but if the volume is raised to 12,000 units, the company will make a profit of Rs. 4.50 per unit. The break-even point in units is Show Answer

Q78) The profit-volume ratio and margin of safety ratio are 30% and 40% respectively. If the total sales is Rs. 3,00,000, the profit of the firm is Show Answer

Q79) A company manufactures a single product which it sells for Rs. 15 per unit. The product has a contribution to sales ratio of 40%. The company's weekly break-even point is sales of Rs. 18,000. What would be the profit in a week when 1,500 units are sold? Show Answer

Q80) An organisation manufactures a single product. The total cost of making 4,000 units is Rs. 20,000 and the total cost of making 20,000 units is Rs. 40,000. Within this range of activity the total fixed costs remain unchanged. What is the variable cost per unit of the product? Show Answer

Q81) 5,400 units of a company's single product were sold for a total revenue of Rs. 1,40,400. Fixed costs in the period were Rs. 39,420 and net profit was Rs. 11,880. What was the contribution per unit? Show Answer

Q82) Sales are Rs. 3,20,000, fixed costs are Rs. 80,000 and variable costs are Rs. 1,20,000. What is the safety margin? Show Answer

Q83) An organisation manufactures a single product which has a-variable cost of Rs. 36 per unit. The organisation's total weekly fixed costs are Rs. 81,000 and it has a contribution to sales ratio of 40%. This week it plans to manufacture and sell 5,000 units. What is the organisation's margin of safety in units? Show Answer

Q84) An organization's break-even point is 4,000 units at a sales price of Rs. 50 per unit, variable cost of Rs. 30 per unit, and total fixed costs of Rs. 80,000. If the company sells 500 additional units, by how much will its profit increase? Show Answer

Q85) Banta Ltd., manufactures product KDM for last ten years. The company maintains a margin of safety of 36% with an overall contribution to sales ratio of 35%. If fixed cost is Rs. 8.4 lakh, the profit of the company is Show Answer

Q86) A company wishes to make a profit of Rs. 1,50,000. It has fixed costs of Rs. 75,000 with a C/S ratio of 0.75 and a selling price of Rs. 10 per unit. How many units would the company need to sell in order to achieve the required level of profit? Show Answer

Q87) A company has a profit-volume ratio of 20%. To maintain the same contribution, by what percentage (%) must sales be increased to offset 10% reduction in selling price Show Answer

Q88) Marginal Costing is a method of costing. Show Answer

Q89) Contract Costing is a technique of costing. Show Answer

Q90) In Absorption Costing Fixed as well as Variable Costs are charged to products. Show Answer

Q91) Absorption costing ignores the Cost - Volume - Profit Relationship. Show Answer

Q92) Increase in price leads to lower Margin of Safety. Show Answer

Q93) In the break-even chart, Fixed Costs Line will be straight line parallel to the X-axis. Show Answer

Q94) A large angle of incidence in the break-even chart indicates higher rate of profit. Show Answer

Q95) Contribution margin is also known as Gross profit. Show Answer

Q96) If activity increases by 10% the semi variable cost per unit will reduce in proportion to the change in activity. Show Answer

Q97) In Marginal Costing the price can be fixed on the basis of only Variable Costs. Show Answer

Q98) If the selling price is below the total cost but above the marginal cost the contribution will lead to an over-recovery of fixed expenses. Show Answer

Q99) If the product is sold at marginal cost, the loss will be equal to the variable expenses. Show Answer

Q100) The effect of a price reduction is always to improve the P/V ratio. Show Answer

Q101) The effect of a price reduction is always to lower the break-even point. Show Answer

Q102) If the selling price and the variable cost decline by the same amount, the contribution per unit will decrease. Show Answer

Q103) To perform cost-volume-profit analysis, a company must be able to separate costs into fixed and variable components. Show Answer

Q104) In CVP analysis, variable costs include direct variable costs, but do not include indirect variable costs. Show Answer

Q105) If the selling price per unit is Rs. 20 and the contribution margin percentage is 30%, then the variable cost per unit must be Rs. 6. Show Answer

Q106) Total revenues less total fixed costs equal the contribution margin. Show Answer

Q107) Breakeven point is that quantity of output where total revenues equal total costs. Show Answer

Q108) An increase in the tax rate will increase the breakeven point. Show Answer

Q109) If a company's breakeven sales is Rs. 100 and its sales is Rs. 125, then its margin of safety percentage is 25%. Show Answer

Q110) If contribution margin decreases by Rs. 10 per unit, then operating profits will increase by Rs. 10 per unit. Show Answer

Q111) If variable costs per unit increase, then the breakeven point will decrease. Show Answer

Q112) If a company increases fixed costs, then the breakeven point will be lower. Show Answer

Q113) Contribution margin and gross margin mean one and the same thing. Show Answer

Q114) Gross Profits will always be greater than contribution margin. Show Answer

Q115) At the break-even point, variable expenses and fixed expenses are equal. Show Answer

Q116) The contribution margin at the break-even point is zero. Show Answer

Q117) Margin of Safety = Break-even sales - Fixed cost. Show Answer

Q118) Margin of safety indicates profit. Show Answer

Q119) Sales below break-even point means profit. Show Answer

Q120) Contribution is always equal to fixed costs. Show Answer

Q121) Margin of safety implies 'break even point'. Show Answer

Q122) A firm incurs a loss when contribution is equal to fixed cost. Show Answer

Q123) A firm earns profit when contribution is equal to fixed costs. Show Answer

Q124) The variable cost ratio is 1 - P/V ratio. Show Answer