CPA Business Environment and Concepts (BEC) : Operations Management: Budgeting
Study concepts, example questions & explanations for CPA Business Environment and Concepts (BEC)
All CPA Business Environment and Concepts (BEC) Resources
Example Questions
Example Question #3 : Breakeven Formula
A company has total sales of $80,000, total variable costs of $20,000, and total fixed costs of $30,000. What is the breakeven level in sales dollars?
$30,000
$50,000
$40,000
$80,000
$40,000
The contribution margin is sales minus variable costs (80,000-20,000) = 60,000. Then, 60,000/80,000=75%. Then, breakeven is total fixed costs of $30,000/75%=$40,000.
Example Question #4 : Breakeven Formula
A product has sales of $200,000, a contribution margin of 20%, and a margin of safety of $80,000. What is the product's fixed cost?
$96,000
$16,000
$24,000
$80,000
$24,000
($200,000 - $80,000) * 20%
Example Question #5 : Breakeven Formula
What is the formula for breakeven point in units?
CM per Unit/Total FC
Total FC/CM per Unit
Total Costs/CM per Unit
Total VC/CM per Unit
Total FC/CM per Unit
This is the formula for breakeven point in units.
Example Question #1 : Breakeven Formula
How does the margin of safety relate to breakeven in units or sales? It is:
The excess of breakeven sales over sales
The excess of sales over breakeven sales
Unrelated
A measure of profitability
The excess of sales over breakeven sales
The margin of safety is generally expressed as either dollars or a percentage and is the excess of sales over breakeven sales.
All CPA Business Environment and Concepts (BEC) Resources
