Cost Volume Profit Analysis

Question 1

Break even point is?

Accepted Answer

When sales equal total expenses

Question 2

Cost Volume Profit analysis is?

Accepted Answer

a way to make decisions based on cost and volume, where sales price per unit is constant

Question 3

What is direct labour

Accepted Answer

the amount of time spent on repairing a car, the time an employee spends making a pizza base, the time an employee spends producing a good or service

Question 4

Net Profit is

Accepted Answer

The opposite of net loss, Sales less all costs

Question 5

Gross Profit is

Accepted Answer

Sales less cost of goods sold

Question 6

What is contribution margin?

Accepted Answer

Sales price per unit less variable cost per unit, May be equal to gross profit, Sales price less variable cost

Question 7

Variable costs are?

Accepted Answer

Cost that change with the level of production, Things like materials and casual wages

Question 8

Fixed costs are?

Accepted Answer

Costs that do not change with the volume of production, Things like rent and full time wages

Question 9

The difference between management and financial accounting

Accepted Answer

financial accounting complies with accounting standards, Management accounting is used for internal purposes, Management accounting makes future business decisions

Question 10

Overhead costs are?

Accepted Answer

other costs directly traced to the making of a product, an overhead cost could be electricity or gas to make a pizza, product costs other than direct labour and direct materials

Question 11

Market Potential is?

Accepted Answer

Number of buyers and what they will spend

Question 12

What are direct materials?

Accepted Answer

Direct materials could be plastic for Lego, materials and supplies used during the making of a product

Question 13

A product cost is

Accepted Answer

different to a period cost, wheels to make a car, All costs involved in the creation of a good or service

Question 14

What is profit?

Accepted Answer

The opposite of loss, Sales less expenses

Question 15

What is a period cost

Accepted Answer

are costs like marketing, are costs like accounting, A cost not directly required to produce a good or service

Cost Volume Profit Analysis

Questions 15

Cost Volume Profit Analysis

Questions 15