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.What is the sales mix expressed in terms of units but not revenues

.What is the sales mix expressed in terms of?

a.units but not revenues

b.either revenues or units

c.revenues but not units

d.neither units nor revenue

 

 

 

82.Which of the following should be used to compute the sales mix so that the break-even computation is meaningful to management?

a.the expected mix

b.the most desirable mix

c.the least desirable mix

d.the traditional mix

 

 

 

83.Which of the following is NOT an assumption of a cost-volume-profit analysis?

a.Selling price and costs can be accurately identified.

b.Selling price and costs remain constant within the relevant range.

c.Inventory levels can increase or decrease.

d.Selling price and costs behave in a linear manner.

 

 

 

84.What “what-if” technique examines the impact on an answer as a result of changes in underlying assumptions?

a.degree of sensitivity

b.sensitivity training

c.sensitivity analysis

d.degree of operating leverage

 

 

 

85.What is the result when actual sales equal break-even sales?

a.the margin of safety is negative

b.the margin of safety is positive

c.the margin of safety equals zero

d.the margin of safety is negative or positive

 

 

 

86.What is the formula to calculate the margin of safety in dollars?

a.expected sales – expected profit

b.expected sales – sales at break-even

c.costs at break-even – expected profit

d.expected costs – costs at break-even

 

 

 

87.Which of the following can be considered a measure of risk in cost-volume-profit analysis?

a.margin of safety

b.contribution margin ratio

c.contribution margin

d.fixed cost

 

 

 

88.By what amount can sales decline before losses are incurred?

a.by the contribution margin

b.by the margin of safety

c.by the degree of operating leverage

d.by the fixed costs

 

 

 

89.What would be the effect on the break-even point if sales remain the same and the margin of safety increases?

a.The break-even point would increase.

b.The break-even point would decrease.

c.The break-even point would decrease by half.

d.The break-even point would remain the same.

 

 

 

90.Which of the following measures the sensitivity of profit changes to changes in sales volume?

a.contribution margin ratio

b.variable cost ratio

c.operating leverage

d.degree of operating leverage

 

 

 

 

91.Which is characteristic of operating leverage?

a.concerned with the relative mix of contribution margin and margin of safety

b.the use of fixed costs to extract higher percentage changes in profits as sales activity changes

c.likely to be lower in an automated manufacturing system than in a manual system

d.provides the same information as margin of safety

 

 

 

92.Which of the following measures the percentage change in profits resulting from a percentage change in sales?

a.variable cost leverage

b.contribution margin ratio

c.degree of operating leverage

d.sales margin ratio

 

 

 

93.What formula is used to calculate the degree of operating leverage?

a.contribution margin/profit

b.profit/fixed costs

c.profit/variable costs

d.total sales/profit

 

 

 

94.What is operating leverage the relative mix of?

a.revenues earned and manufacturing costs

b.fixed and variable costs

c.high-volume and low-volume products

d.manufacturing costs and period costs

 

 

 

95.Which graph depicts the relationships among total variable costs, total fixed costs, number of units, and operating income?

a.cost graph

b.volume graph

c.cost-volume-profit graph

d.break-even graph

Mar 13 2020 View more View Less

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