Question
The CVP model is one example of a financial model that can be used to calculate which of the following? a. required selling price and
The CVP model is one example of a financial model that can be used to calculate which of the following?
| a. | required selling price and conduct sensitivity analysis. |
| b. | new break-even points and calculate multiple break-even points. |
| c. | target profit points and compare alternatives. |
| d. | All of the answers are correct. |
2. Which of the following is the correct formula to use to calculate the contribution margin per unit?
| a. | Selling price per unit less fixed costs and variable costs per unit. |
| b. | Selling price per unit less fixed costs per unit. |
| c. | Selling price per unit less variable costs per unit. |
| d. | None of the answers is correct. |
3. What happens to the contribution margin if fixed expenses decrease while variable cost per unit remain constant.
| a. | Contribution margin will be unchanged. |
| b. | Contribution margin will be higher. |
| c. | Contribution margin will be lower. |
| d. | Cannot determine the change. |
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