When the fixed cost is divided into contribution margin per unit, it gives _________?
Correct answer: B. breakeven number of units
- A. fixed output
- B. breakeven number of units
- C. variable output
- D. total number of units
Explanation
At break-even, total contribution margin equals total fixed cost. Dividing fixed cost by contribution margin per unit therefore gives the number of units required to break even.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
Practise Cost Accounting
941 free Cost Accounting MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Accounting questions like this
Accounting is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Cost Accounting questions
The book value of existing equipment is a historical cost and not necessary for deciding equipment replacement, thus it can be considered as ___________?
The factor, which is largely considered in making or buying decisions is __________?
As compared to irrelevant cost, the occurrence of relevant costs must ___________?
If the contribution margin percentage is 30%, the selling price is $5000, then the contribution margin per unit will be ____________?
If the selling price is $5000, the contribution margin per unit is $1000, then the contribution margin percentage will be _____________?
If the revenue is $15000, the total variable cost is $5000 and the fixed cost $2000 then the operating income will be ____________?