Contribution Margin Analysis: Question Preview (ID: 13758)

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What is Contribution Margin Analysis?
a) A cost accounting concept that calculates extra money.
b) A cost accounting concept that allows a company to determine profitability of a individual product.
c) Green Apples.
d) A cost accounting concept that reports the amount donated to charities and external organizations.

Managers use this analysis for...
a) Red Apples.
b) Deciding if they need to donate more to external organizations.
c) Only for creating new products.
d) Planning and controlling operations.

Quantity Factor is...
a) The difference in sales price.
b) Not related to variable factors.
c) The difference in number of units sold.
d) The difference of cost of goods sold.

Actual Units Sold: 28,000; Planned Units of Sale: 25,000; Planned Sales Price: 57.50. What is the Sales Quantity Factor?
a) $3,047,500
b) $172,500
c) $53,000
d) $-172,500

What does the answer of question #4 mean?
a) A positive amount has increased sales and contribution margin.
b) A negative amount has decreased sales.
c) Less units have been sold than planned.
d) The company will be canceling the product that was being sold.

Actual Selling Price per Unit: 55.00; Planned Selling Price per Unit: 57.50; Actual Units Sold: 45,788 What is the Unit Price Factor?
a) $470,788
b) $114,470
c) $-114,470
d) $-470,000

Which statement is true?
a) The factors are not for sales and variable costs.
b) Contribution Margin is VARIABLE COST-SALES.
c) Sales and variable cost affect planned and actual.
d) Actual and planned affects nothing.

Planned Cost per Unit: 65.00; Actual Cost per Unit: 45.75; Actual Units Sold: 30,000 What is the Unit Cost Factor?
a) $577,500
b) $-500,000
c) $-190,750
d) $500,000

What is the Variable Cost Quantity Factor? Planned Units of Sales: 20,000; Actual Units Sold: 15,500; Planned Unit Cost: 400
a) $100,000
b) $50,000
c) $150,000
d) $200,000

True or False: Contribution Margin DOES NOT involve cost, volume or profit.
a) True
d) False

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