IB Business Management MCQ QuizIB_Business_Management_5_5 Resear

Which of the following does not apply to total contribution?

• It is calculated using the formula: (Selling price – Average variable costs) × Quantity

• It is the difference between total sales revenue and total costs

• It refers to the amount of money remaining to cover fixed costs after total variable costs are deducted from total sales revenue

• The formula is: Total sales revenue – Total variable costs

Identify the formula used to calculate contribution per unit.

• (Fixed costs) / (Price – Average variable cost)

• Selling price – Average variable cost

• Selling price – Average variable cost – Fixed costs

• Total sales revenue – Total variable costs

A firm sells its output for $649. Variable costs per unit are $456, and total fixed costs are $2,500,000. This year, 5,000 units of output were sold. Identify the contribution per unit.

• $0.22

• $22.1

• $193

• $649

Use the following data to identify the total contribution. Selling price = $45. Variable costs per unit = $41. Total fixed costs = $150,000. Quantity produced and sold = 72,150 units.

• -$438,600

• $138,600

• $288,600

• $3,246,750

A firm sells its output for $90. Variable costs per unit are $82, total fixed costs are $300,000, and 144,300 units of output were sold this year. Identify the total profit.

• $577,200

• $854,400

• $1,154,400

• $1,454,400

Which of the following is not a purpose of using contribution analysis?

• Calculating break-even

• Managing product portfolios

• Position mapping

• Setting prices

Identify the best description of the break-even point.

• The level of output where a firm makes neither a profit nor a loss

• The level of output where fixed costs are covered by sales revenue

• The level of output where variable costs are equal to fixed costs

• The point at which profits begin to exceed fixed costs

Identify the formula used to calculate the break-even level of output.

• Fixed costs / (Selling price – Average variable costs)

• Fixed costs / Selling price

• Selling price / (Fixed costs – Contribution per unit)

• Total sales revenue / Contribution per unit

A shoe manufacturer has fixed costs of $30,000 per month. Variable cost per pair of shoes is $15, and the selling price is $40. Identify the break-even level of output.

• 750 pairs of shoes

• 1,000 pairs of shoes

• 1,200 pairs of shoes

• 2,000 pairs of shoes

Fixed costs for a printer manufacturer are $475,000 per month. Each printer sells for $100. The break-even level of output is 9,500 printers per month. Identify the variable costs per printer.

• $45.00

• $47.50

• $48.00

• $50.00