4. Management Accounting

Marginal Costing — Quiz

Test your understanding of marginal costing with 5 practice questions.

Practice Questions

Question 1

A company has total fixed costs of $\$45,000$, a selling price per unit of $\$75$, and a variable cost per unit of $\$45. If the company sells 2,000 units, what will be the total profit?

Question 2

Which of the following best describes how the break-even point in units is affected if both selling price per unit and variable cost per unit increase by the same amount, with fixed costs remaining constant?

Question 3

A company wants to increase its profit by $\$10,000. Its contribution per unit is $\$25 and its total fixed costs are $\$35,000. How many additional units must the company sell to achieve this increase in profit?

Question 4

If a company’s profit-volume (P/V) ratio is $50\%$ and its total fixed costs are $\$80,000, what is the break-even sales revenue?

Question 5

A company sells a product for $\$90 per unit. The variable cost per unit is $\$60, and the company’s total fixed costs are $\$54,000. If the company sells 2,500 units, what will be the total contribution margin?