40+ Marginal Costing MCQ | Cost Accounting MCQs (Free Resource)

11. At the break-even point, which equation will be true.
(a) Variable cost – fixed cost = contribution
(b) Sales = variable cost + fixed cost
(c) Sales – fixed cost = contribution
(d) Sales – contribution = variable cost

12. The break-even points in units is equal to
(a) Fixed cost/PV ratio
(b) Fixed cost x sales/total contribution
(c) Fixed cost/contribution per unit
(d) Fixed cost/total contribution

13. When fixed cost increases, the break-even point
(a) Increases
(b) Decreases
(c) No effect
(d) Can’t say

14. When variable cost decreases, the break-even point
(a) Increases
(b) Decreases
(c) No effect
(d) Can’t say

15. When selling price decreases, the break-even point
(a) Increases
(b) Decreases
(c) No effect
(d) Can’t say

16. When sales increases then break-even point
(a) Increases
(b) Decreases
(c) Remains constant
(d) None of these

17. Which of the following can improve break-even point?
(a) Increase in variable cost
(b) Increase in fixed cost
(c) Increase in sale price
(d) Increase in sales volume
(e) Increase in production volume

18. Which of the following describes the margin of safety?
(a) actual contribution margin achieved compared with that required to break-even
(b) actual sales compared with sales required to break-even
(c) actual versus budgeted net profit margin
(d) actual versus budgeted sales

19. Margin of safety is expressed as
(a) Profit / P/V ratio
(b) (Actual sales – sales at BEP ) / Actual sales
(c) Actual sales – Sales at BEP
(d) All of the above

20. Under which of the following cases the margin of safety decreases?
(a) Reduction in fixed cost
(b) Increase in variable cost
(c) Increase in the level of production or selling price or both
(d) Change in the sales mix in order to increase the contribution
(e) Substitute the existing unprofitable product with the profitable ones

Answers: 11)Sales = variable cost + fixed cost 12)Fixed cost/contribution per unit 13)Increases 14)Decreases 15)Increases 16)Remains constant 17)Increase in sale price 18)actual sales compared with sales required to break-even 19)All of the above 20)Increase in variable cost

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