To calculate what, fixed cost is divided into contribution margin per unit?

A fixed output
B variable output
C breakeven number of units
D total number of units

Correct Answer: breakeven number of units

To calculate breakeven number of units, fixed cost is divided into contribution margin per unit. A break-even analysis is a financial tool which helps you to determine at what stage your company, or a new service or a product, will be profitable. In other words, it’s a financial calculation for determining the number of products or services a company should sell to cover its costs (particularly fixed costs). Break-even is a situation where you are neither making money nor losing money, but all your costs have been covered.
Bissoy MCQ
#Management #Management Accounting

Related Questions

MN Company is planning to sell 200,000 pliers for Tk 4 per unit. The contribution margin ratio is 25% and fixed cost is Tk 40,000. What is the margin of safety of MN Company?
A 15%
B 20%
C 25%
D 30%
E None of these
A company wishes to earn a 20% profit margin on selling price . Which of the following is he profit mark-up on cost , which will achieve the required profit margin ?
A 33%
B 25%
C 20%
D 50%
A company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark-up on cost, which will achieve the required profit margin ?
A 33%
B 25%
C 20%
D 50%
If ‘F’ is the fixed cost, ‘V’ is the variable cost per unit (or total variable costs) and ‘P’ is the selling price of each unit (or total sales value), then break-even point is equal to
A $$\frac{{{\text{F}} \times {\text{V}}}}{{\text{P}}}$$
B $$\frac{{{\text{F}} \times {\text{P}}}}{{\text{V}}}$$
C $$\frac{{\text{F}}}{{1 + \frac{{\text{V}}}{{\text{P}}}}}$$
D $$\frac{{\text{F}}}{{1 - \frac{{\text{V}}}{{\text{P}}}}}$$
Based on the information below, how much did a certain telephone call cost? 1. The call lasted 1 minute 27 seconds 2. The cost for the first 30 second unit is Tk. 1.80, call duration more than 30 seconds costs Tk. 0.90 per 30 second unit 3. Any call duration less than 30 seconds is rounded up to the nearest 30-second unit.
A Tk. 1.80
B Tk. 2.61
C Tk. 2.70
D Tk. 3.51
For large farms to be as productive as they can be, their owners need to invest heavily in expensive machinery. This typically requires them to go into considerable debt, and interest on this debt is then a significant fixed cost. This high fixed cost makes those farmers vulnerable to operating losses if the price of their products drop.
A They can be highly productive without being profitable.
B They tend to be so highly productive that they drive down market prices.
C They tend to be consistenly profitable if their owners borrow at low interest rates.
D They respond to opearting losses by increasing their productivity.
In a recent year, Windsor's Boat's reported an asset turnover ratio of 2.46 times and a profit margin of 19.8% . In the same year, Sarah's Sail Boats reported an asset turnover ratio of 1.27 times and a profit margin of 9.9% . Which of the following statements is false ?
A Sarah's did a better job of turning over its assets
B Windsor's did a better job of generating profit from its sales
C Windsor's return on assets (ROA) is 48.7% while Sarah's return on assets is 12.6%
D None of the other answers is false
Gain margin and phase margin can be determined from Bode plots as well as Nyquist plot.
A True
B False
Which of the following statements is correct for a system with gain margin close to unity or a phase margin close to zero ?
A The system is relatively stable
B The system is highly stable
C The system is highly oscillatory
D None of the above
Typical specifications for design stipulates the gain margin and phase margin to be respectively
A > 1.7 and > 30°
B 30°
C > 1.7 and

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