ACT185_BASTRCSX Quiz no.2 midterm (2)
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1.If fixed costs are P250,000, the unit selling price is P125, and the unit variable
costs are P73, what is the break-even sales (units)?
(2 Points)
3,425 units
2,381 units
2,000 units
4,808 units
2.The point where the profit line intersects the horizontal axis on the profitvolume chart represents:
(1 Point)
the maximum possible operating loss
the maximum possible operating income
the total fixed costs
the break-even point
3.Omega DB Company has sales of P360,000, variable costs of P216,000, and
fixed costs of P150,000. To earn a 10% return on sales, Omega DB must have
sales of
(2 Points)
P375,000.
P440,000.
P470,000.
P500,000.
4.If fixed costs increased and variable costs per unit decreased, the break-even
point would:
(1 Point)
increase
decrease
remain the same
cannot be determined from the data provided
5.Omega DB, Inc. produces only two products, Alpha and Beta. These account for
60% and 40% of the total sales pesos of Omega DB, respectively. The unit
variable expense as a percentage of the selling price is 60% for Alpha and 85%
for Beta. Total fixed expenses are P150,000. There are no other costs. What is
Omega DB's break-even point in sales pesos?
(2 Points)
P150,000
P214,286
P300,000
P500,000
6.If sales are P914,000, variable costs are P514,800, and operating income is
P260,000, what is the contribution margin ratio?
(2 Points)
53.1%
33%
64%
43.7%
7.Which formula gives unit sales required to earn a target profit? (P = selling
price, V = variable cost per unit, F = total fixed costs, T = target profit)
(1 Point)
F/(P - V)
(F + T)/P
(F + T)/(P - V)
(F + T)/V
8.The systematic examination of the relationships among selling prices, volume of
sales and production, costs, and profits is termed:
(1 Point)
contribution margin analysis
cost-volume-profit analysis
budgetary analysis
gross profit analysis
9.If fixed costs are P300,000, the unit selling price is P31, and the unit variable
costs are P22, what is the break-even sales (units) if fixed costs are reduced by
P30,000?
(2 Points)
30,000 units
8,710 units
12,273 units
20,000 units
10.If the sales mix shifts toward higher contribution margin products, the breakeven point
(1 Point)
decreases.
increases.
remains constant.
it is impossible to tell without more information.
11.If fixed costs are P1,400,000, the unit selling price is P240, and the unit variable
costs are P110, what is the amount of sales required to realize an operating
income of P200,000?
(2 Points)
10,769 units
12,000 units
12,308 units
1,538 units
12.A firm operated at 80% of capacity for the past year, during which fixed costs
were P210,000, variable costs were 70% of sales, and sales were P1,000,000.
Operating profit was:
(2 Points)
P90,000
P210,000
P590,000
P490,000
13.If fixed costs are P500,000, the unit selling price is P55, and the unit variable
costs are P30, what is the break-even sales (units) if fixed costs are increased by
P80,000?
(2 Points)
10,545 units
19,333 units
23,200 units
25,000 units
14.Company A has a lower variable cost per unit and higher total fixed costs than
Company B. The selling prices of their products are the same. Sales fluctuate
considerably for both companies. Therefore,
(1 Point)
Company A has a lower break-even point than Company B.
Company A earns more profit than Company B.
Company A is more risky than Company B.
Company A has a lower contribution margin percentage than Company B.
15.Which of the following conditions would cause the break-even point to
decrease?
(1 Point)
Total fixed costs increase
Unit selling price decreases
Unit variable cost decreases
Unit variable cost increases
16.Introducing income taxes into cost-volume-profit analysis
(1 Point)
raises the break-even point.
lowers the break-even point.
increases unit sales needed to earn a particular target profit.
decreases the contribution margin percentage.
17.The difference between the current sales revenue and the sales at the breakeven point is called the:
(1 Point)
contribution margin
margin of safety
price factor
operating leverage
18.In cost-volume-profit analysis, all costs are classified into the following two
categories:
(1 Point)
mixed costs and variable costs
sunk costs and fixed costs
discretionary costs and sunk costs
variable costs and fixed costs
19.If fixed costs are P750,000 and variable costs are 80% of sales, what is the
break-even point in sales pesos?
(2 Points)
P937,500
P600,000
P3,750,000
P1,275,000
20.Which of the following conditions would cause the break-even point to
increase?
(1 Point)
Total fixed costs decrease
Unit selling price increases
Unit variable cost decreases
Unit variable cost increases
21.The indifference point is the level of volume at which a company
(1 Point)
earns the same profit under different operating schemes.
earns no profit.
earns its target profit.
any of the above.
22.If sales are P425,000, variable costs are 68% of sales, and operating income is
P50,000, what is the contribution margin ratio?
(2 Points)
32%
26.8%
11.8%
63%
23.Which of the following is an assumption underlying standard CVP analysis?
(1 Point)
Fixed expenses will change as volume increases.
In manufacturing companies, inventories always change.
The price of a product or service is expected to change as volume changes.
In multiproduct companies, the sales mix is constant.
24.Omega DB Inc. sells three products with the following results: Alpha Beta
Gamma ------ ------ ------ Sales P10,000 P20,000 P30,000 Variable costs 4,000
12,000 15,000 What is the weighted average contribution margin percentage?
(2 Points)
48.3%
50.0%
51.7%
Cannot be determined with the information given.
25.Contribution margin is:
(1 Point)
the excess of sales revenue over variable cost
another term for volume in the "cost-volume-profit" analysis
profit
the same as sales revenue
26.Machine X has fixed costs of P450,000 and a variable cost of P20. Machine Y
has fixed costs of P600,000 and a variable cost of P14. What is the indifference
point, in units?
(2 Points)
22,500
25,000
42,858
An amount that cannot be determined without more information.
27.The relative distribution of sales among the various products sold by a
business is termed the:
(1 Point)
business's basket of goods
contribution margin mix
sales mix
product portfolio
28.Which of the following is not an assumption underlying cost-volume-profit
analysis?
(1 Point)
The break-even point will be passed during the period.
Total sales and total costs can be represented by straight lines.
Costs can be accurately divided into fixed and variable components.
The sales mix is constant.
29.Variable costs as a percentage of sales for Omega DB Inc. are 80%, current
sales are P600,000, and fixed costs are P130,000. How much will operating
income change if sales increase by P40,000?
(2 Points)
P8,000 increase
P8,000 decrease
P30,000 decrease
P30,000 increase
30.Cost-volume-profit analysis cannot be used if which of the following occurs?
(1 Point)
Costs cannot be properly classified into fixed and variable costs
The total fixed costs change
The per unit variable costs change
Per unit sales prices change
31.What ratio indicates the percentage of each sales dollar that is available to
cover fixed costs and to provide a profit?
(1 Point)
Margin of safety ratio
Contribution margin ratio
Costs and expenses ratio
Profit ratio
32.Omega DB Inc.'s unit selling price is P60, the unit variable costs are P35, fixed
costs are P125,000, and current sales are 10,000 units. How much will operating
income change if sales increase by 8,000 units?
(2 Points)
P150,000 decrease
P175,000 increase
P200,000 increase
P150,000 increase
33.Omega DB Corporation produces and sells two products. In the most recent
month, Product Rx had sales of P20,000 and variable expenses of P7,400. Product
Ph had sales of P39,000 and variable expenses of P6,170. And the fixed expenses
of the entire company were P41,160. The break-even point for the entire
company is closest to:
(2 Points)
P41,160
P17,840
P53,455
P54,730
34.In a cost-volume-profit chart, the
(1 Point)
total cost line begins at zero.
slope of the total cost line is dependent on the fixed cost per unit.
total cost line begins at the total fixed cost value on the vertical axis.
total cost line normally begins at zero.
35.If variable costs per unit increased because of an increase in hourly wage rates,
the break-even point would:
(1 Point)
decrease
increase
remain the same
increase or decrease, depending upon the percentage increase in wage rates
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