Marginal Costing Basics

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Q. A company has a variable cost of $12 per unit and a selling price of $20 per unit. What is the contribution margin ratio?
  • A. 40%
  • B. 50%
  • C. 60%
  • D. 70%
Q. A company sells a product for $50 per unit. If the variable cost per unit is $30, what is the contribution margin per unit?
  • A. $20
  • B. $30
  • C. $50
  • D. $10
Q. A product has a selling price of $80 and variable costs of $50. What is the contribution margin ratio?
  • A. 37.5%
  • B. 50%
  • C. 25%
  • D. 62.5%
Q. If a company has a margin of safety of $5,000 and its total sales are $25,000, what is the break-even sales level?
  • A. $20,000
  • B. $25,000
  • C. $30,000
  • D. $15,000
Q. If a company has a selling price of $80, variable costs of $50, and fixed costs of $10,000, what is the margin of safety in dollars if they expect to sell 300 units?
  • A. $2,000
  • B. $4,000
  • C. $6,000
  • D. $8,000
Q. If a company has fixed costs of $5,000 and variable costs of $15 per unit, what is the total cost for producing 200 units?
  • A. $5,000
  • B. $10,000
  • C. $10,500
  • D. $8,000
Q. If a company has fixed costs of $5,000 and variable costs of $15 per unit, what is the marginal cost per unit?
  • A. $5
  • B. $15
  • C. $20
  • D. $25
Q. If a company produces 1,000 units at a total cost of $15,000, what is the average cost per unit?
  • A. $10
  • B. $15
  • C. $20
  • D. $25
Q. If a company produces 200 units and incurs total variable costs of $4,000, what is the variable cost per unit?
  • A. $15
  • B. $20
  • C. $25
  • D. $30
Q. If the fixed costs are $12,000 and the variable cost per unit is $20, how many units must be sold to achieve a target profit of $8,000 if the selling price is $50?
  • A. 400 units
  • B. 500 units
  • C. 600 units
  • D. 700 units
Q. If the total fixed costs are $12,000 and the contribution margin ratio is 40%, what is the sales revenue needed to break even?
  • A. $30,000
  • B. $40,000
  • C. $50,000
  • D. $60,000
Q. What is the break-even point in units if fixed costs are $10,000 and the contribution margin per unit is $25?
  • A. 400 units
  • B. 500 units
  • C. 600 units
  • D. 300 units
Q. What is the break-even point in units if fixed costs are $10,000 and the contribution margin per unit is $50?
  • A. 100 units
  • B. 200 units
  • C. 300 units
  • D. 400 units
Q. What is the marginal cost of producing one additional unit if the total cost of producing 100 units is $1,000 and the total cost of producing 101 units is $1,020?
  • A. $20
  • B. $10
  • C. $30
  • D. $15
Q. What is the total contribution if a company sells 300 units with a contribution margin of $40 per unit?
  • A. $12,000
  • B. $10,000
  • C. $15,000
  • D. $8,000
Q. What is the total contribution margin if a company sells 150 units at a contribution margin of $25 per unit?
  • A. $2,500
  • B. $3,000
  • C. $3,500
  • D. $4,000
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