CVP analysis - Lesson 1recap

Within the relevant range, Total Fixed Costs (TFC) _____________ when activity level increases.

• increase

• decrease

• remain unchanged

Which of these are fixed costs? (multiple correct answers)

• Operation Staff

• Rent

• Utility

• Admin Support

• Marketing

Within the relevant range, Unit Variable Cost ____________ when activity level increases.

• increase

• decrease

• remain constant

Which of these are correct formulas for Unit Contribution Margin UCM? (multiple correct answers)

• UCM = Unit Selling Price / Total Fixed Cost

• UCM = Unit Selling Price - Unit Variable Cost

• UCM = Total Contribution Margin / Volume

• UCM = Unit Selling Price + Unit Variable Cost

Which of the following occurs at Breakeven Point? (multiple correct answers)

• Profit = 0

• Total Sales Revenue = Total Fixed Costs TR= TFC

• Total Sales Revenue = Total Costs TR= TC

• Total Contribution Margin = Total Fixed Costs TCM = TFC

Contribution Margin Ratio (CMR) is 

 $\frac{Unit\ Contribution\ M\arg in\ }{Unit\ Selling\ \Pr ice}$  

• True

• False

Which of these are correct formulas used to determine breakeven point? (multiple correct answers)

• BEPunits = $\frac{TFC}{UCM}$

• BEPunits = $\frac{TFC}{CMR}$

• BEP$ = $\frac{TFC}{UCM}$

• BEP$ = $\frac{TFC}{CMR}$