CVP ANALYSIS 2

How to calculate the Break-even point in units?

• Total fixed costs/ Contribution per unit

• Total fixed costs/ Contribution margin ratio

• Contribution per unit/ Total fixed costs

• Sales/ Total fixed costs

If the selling price is $32 per unit, the variable cost is $24, and the total fixed cost is $320,000 what will be the break-even point in units?

• 10,000 units

• 13,333 units

• 40,000 units

• 5,200 units

Choose the formula to calculate the Break-even point (sales revenue)?

• BEP in units/ selling price unit

• Selling price unit/ BEP units

• BEP in units x selling price unit

• Selling price unit/BEP units x 100

If the Contribution Margin ratio is 0.4 and the total fixed costs are $280,000, the break-even point in dollars will be?

• 112,000

• 57,000

• 700,000

• 3456,690

How to calculate the Contribution margin ratio?

• Sales/ Contribution x 100

• Contribution x Sales x 100

• Total fixed costs + Contribution

• Contribution/ Sales x 100

Pick the formula for Target profit (units)

• Total variable costs + Target profit/ Contribution per unit

• Total fixed costs + Target profit/ Contribution per unit

• Target profit - Fixed costs - Variable costs / Contribution per unit

• Target profit + Contribution per unit - Fixed costs

Select the correct formula for Target profit (sales revenue)

• Target profit in units x selling price per unit

• Contribution margin % x Target profit

• Total fixed costs + Target profit/ Contribution margin %

• Total fixed costs + Target profit - Contribution margin %

Danny's shoe company sells Product X. Some of the data is stated down below.

Selling price per unit - $16

Variable cost per unit - $12

Total fixed cost - $160,000

How many units of Product X would be required to sell to earn an operating profit of $20,000?

• 45,000

• 11,250

• 15,000

• 23,450

How to calculate the Margin of safety (units)?

• Current/expected sales - BEP units

• BEP units / Current/ expected Sales

• BEP units x Sales / Contribution margin

• Sales / Contribution margin

If current sales are $25,000, the break-even point in dollars is $15,000, and the variable cost is $12,000, the margin of safety will be?

• 13,000

• 10,000

• 27,000

• 33,000