Recent Lessons

Show all results for ""

10 Questions

1 Views

Cost Analysis and Decision Making Quiz

Choose a study mode

Play Quiz

Study Flashcards

Spaced Repetition

Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is a revenue driver?

A factor that indirectly influences the amount of revenue generated.
A factor that only affects the cost side of the business.
A factor that has no impact on the overall revenue.
A factor that directly influences the amount of revenue generated. (correct)

What is the main focus of cost-volume-profit (CVP) analysis?

Projecting future revenue without considering costs.
Analyzing historical cost data for decision making.
Evaluating performance without considering cost variations.
Understanding the relationship between costs, volume, and profits. (correct)

What is the breakeven point in cost-volume-profit (CVP) analysis?

The point at which total revenue exceeds total costs, resulting in maximum profit.
The point at which total revenue is maximized regardless of costs.
The point at which total costs are minimized to increase profits.
The point at which total revenue equals total costs, resulting in zero profit. (correct)

How can sensitivity analysis help managers in the context of cost-volume-profit (CVP) analysis?

By assessing the impact of uncertainty in variables on operating profit. (C) Signup and view all the answers

How does revenue mix affect operating profit in the context of cost-volume-profit (CVP) analysis?

It can impact the overall operating profit by changing the proportion of high and low-margin products or services sold. (A) Signup and view all the answers

What is the primary focus of cost-volume-profit (CVP) analysis?

Determining the breakeven point and target operating profit (D) Signup and view all the answers

How can cost-volume-profit (CVP) analysis assist in cost planning?

By illustrating the effect of revenue mix on operating profit (B) Signup and view all the answers

What is a revenue driver in the context of cost-volume-profit (CVP) analysis?

A factor that directly impacts the generation of revenue (C) Signup and view all the answers

How does sensitivity analysis help managers in the context of cost-volume-profit (CVP) analysis?

By assessing the impact of uncertainty on operating profit (B) Signup and view all the answers

What is the key outcome of understanding the assumptions underlying cost-volume-profit (CVP) analysis?

Ability to distinguish between what drives revenues and costs (D) Signup and view all the answers

Flashcards are hidden until you start studying