Question 1 Which of the following is true at breakeven point? a) Sales revenue = variable cost b) Profit = fixed cost + variable cost c) Sales revenue = total cost variable cost d) Contribution = fixed cost Question 2 An increase in fixed costs will result in which of the following: a) A decrease in the contribution to sales ratio b) A decrease in the contribution per unit c) An increase in the breakeven point sales d) An increase in the margin of safety Question 3 Where opening inventory of 50 units of finished goods are valued at GHS10 each and the average unit cost of 500 units produced during the period is GHS8.90, which method of inventory valuation gives a closing inventory value of GHS9.00 per unit? a) FIFO b) Weighted average c) Absorption cost based on normal activity d) Marginal cost Question 4 Which of the following is true when sales units remain constant each month but production units fluctuate? a) Profit reported each month will always fluctuate in proportion to units produced b) Absorption cost inventory valuation will lead to a higher profit being reported than that where marginal cost inventory valuation is used where sales exceed production c) Marginal cost inventory valuation will give a higher profit than absorption cost inventory valuation where sales exceed production d) Marginal cost inventory valuation will result in the same profit being reported each month Question 5 For performance reporting, it is best to compare actual costs with budgeted costs using: a) Flexible budgets b) Static budgets c) Master budgets d) Short-term budgets