Cost-Volume-Profit Analysis

The costing method that assigns all manufacturing costs to product is called _______________ .

• Variable costing

• Breakeven point

• Absorption costing

When a cost is part variable and part fixed, it is known as ____________.

• Fixed cost

• Absorption costing

• Mixed cost

_____________ is the costing method that assigns only variable manufacturing costs to products.

• Absorption costing

• Variable costing

• Mixed cost

• Breakeven sales

Absorption costing income statement is also known as ___________ income statement.

• Conventional

• Contribution margin

• Breakeven sales

• Margin of safety

Variable costing income statement is also known as ___________ income statement.

• Absorption costing

• Contribution margin

• Conventional

Mixed costs are part variable and part fixed.

• TRUE

• FALSE

Contribution margin is defined as sales revenue less fixed expenses

• TRUE

• FALSE

The contribution margin appears on a conventional Statement of Profit and Loss after cost of goods sold.

• TRUE

• FALSE

Variable costs per unit will:

• decrease as production increases

• increase as production decreases

• remain the same at every level of production

The contribution margin is equal to:

• Fixed expenses plus variable expenses

• Fixed expenses minus variable expenses

• Sales revenue minus variable expenses

• Sales revenue minus fixed expenses