Q. If a company has a contribution margin of $200,000 and fixed costs of $150,000, what is the net profit?
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A.
$50,000
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B.
$200,000
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C.
$150,000
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D.
$350,000
Solution
Net profit = Contribution Margin - Fixed Costs = 200000 - 150000 = $50,000.
Correct Answer:
A
— $50,000
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Q. If a company has a contribution margin of $30 per unit and fixed costs of $90,000, how many units must it sell to break even?
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A.
1,000 units
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B.
3,000 units
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C.
2,000 units
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D.
4,000 units
Solution
Break-even units = Fixed Costs / Contribution Margin = 90,000 / 30 = 3,000 units.
Correct Answer:
B
— 3,000 units
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Q. What is the break-even point in units if fixed costs are $50,000, selling price per unit is $25, and variable cost per unit is $15?
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A.
2,500 units
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B.
5,000 units
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C.
3,000 units
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D.
4,000 units
Solution
Break-even point = Fixed Costs / (Selling Price - Variable Cost) = 50000 / (25 - 15) = 2500 units.
Correct Answer:
A
— 2,500 units
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Q. What is the break-even point in units if fixed costs are $50,000, variable cost per unit is $20, and selling price per unit is $50?
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A.
1,000 units
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B.
2,000 units
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C.
1,500 units
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D.
2,500 units
Solution
Break-even point = Fixed Costs / (Selling Price - Variable Cost) = 50,000 / (50 - 20) = 1,000 units.
Correct Answer:
B
— 2,000 units
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Q. What is the primary focus of marginal costing?
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A.
Total cost of production
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B.
Variable costs only
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C.
Fixed costs only
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D.
Absorption of overheads
Solution
Marginal costing focuses on variable costs and their impact on decision-making.
Correct Answer:
B
— Variable costs only
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Q. Which of the following is NOT a component of total cost?
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A.
Direct materials
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B.
Direct labor
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C.
Selling expenses
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D.
Administrative expenses
Solution
Selling expenses are not considered a component of total cost in production; they are period costs.
Correct Answer:
C
— Selling expenses
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