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US CMA Part 1 Cost Volume Profit Analysis — practice questions

Explore 22 free Cost Volume Profit Analysis questions in US CMA Part 1 Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Cost Volume Profit Analysis questions and exercises with answers

Showing questions 1–22 of 22.

Fixed costs are defined as costs that will not change within a given range of:Read the answer and worked solution →Variable costs are defined as costs that vary per unit of:Read the answer and worked solution →Contribution margin is the amount by which a product's selling price exceeds its total:Read the answer and worked solution →The contribution margin ratio is expressed as a percentage of a unit's:Read the answer and worked solution →Analysing how costs, volume and profit interact is called:Read the answer and worked solution →CVP analysis begins its discussion with which point?Read the answer and worked solution →Which two further concepts are named alongside the break-even point in CVP analysis?Read the answer and worked solution →After the break-even point, the analysis turns to a firm's:Read the answer and worked solution →A cost that stays the same whether 100 or 200 units are produced within the relevant range is:Read the answer and worked solution →A cost that rises by a set amount for each additional unit made is:Read the answer and worked solution →Contribution margin per unit is available to cover which costs first?Read the answer and worked solution →The contribution margin ratio tells you what percentage of the selling price exceeds:Read the answer and worked solution →A birdbath selling for 100 dollars with 40 dollars of variable cost has a contribution margin of:Read the answer and worked solution →A product selling for 100 dollars with a 60 dollar contribution margin has a contribution margin ratio of:Read the answer and worked solution →Fixed costs of 13,500 dollars and a contribution margin of 60 dollars per unit give a break-even volume of:Read the answer and worked solution →Raising the selling price while holding variable cost constant changes the contribution margin so it:Read the answer and worked solution →A firm below its break-even point is making a loss because contribution margin has not yet covered:Read the answer and worked solution →Work the CVP arithmeticRead the answer and worked solution →Tap the fixed and variable costsRead the answer and worked solution →Match each CVP termRead the answer and worked solution →True or false: cost-volume-profitRead the answer and worked solution →Complete the CVP rulesRead the answer and worked solution →

Worked practice questions

Fixed costs are defined as costs that will not change within a given range of:

  1. Production
  2. Advertising
  3. Employment
  4. Borrowing
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Correct answer: A. Production

1. Costs are classified by how they respond to output. 2. Some costs stay the same whether output rises or falls. 3. Fixed costs are those costs that will not change within a given range of production. 4. Rent on a factory is the standard example. _Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 3 'Cost-Volume-Profit Analysis'_

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Variable costs are defined as costs that vary per unit of:

  1. Regulation
  2. Production
  3. Advertising
  4. Financing
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Correct answer: B. Production

1. The other cost class moves with output. 2. Fixed costs do not change within a given range of production. 3. Variable costs are those costs that vary per unit of production. 4. Materials used in each unit are the standard example. _Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 3 'Cost-Volume-Profit Analysis'_

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Contribution margin is the amount by which a product's selling price exceeds its total:

  1. Variable cost per unit
  2. Fixed cost per year
  3. Advertising cost paid
  4. Interest cost owed
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Correct answer: A. Variable cost per unit

1. Contribution margin measures what each sale contributes. 2. Each unit sold brings in a selling price and incurs a variable cost. 3. Contribution margin is the amount by which selling price exceeds total variable cost per unit. 4. That surplus goes toward covering fixed costs. _Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 3 'Cost-Volume-Profit Analysis'_

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