{"id":59463,"date":"2024-04-16T01:37:37","date_gmt":"2024-04-16T01:37:37","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=59463"},"modified":"2024-04-16T01:37:37","modified_gmt":"2024-04-16T01:37:37","slug":"match-the-following-list-i-list-ii-a-excess-of-actual-sales-over-the-break-even-sales-volume-1-contribution-b-sum-of-fixed-cost-and-profit-2-cost-volume-profit-analysis-c-break-even-chart-3-una","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/match-the-following-list-i-list-ii-a-excess-of-actual-sales-over-the-break-even-sales-volume-1-contribution-b-sum-of-fixed-cost-and-profit-2-cost-volume-profit-analysis-c-break-even-chart-3-una\/","title":{"rendered":"Match the following. List-I List-II a. Excess of actual sales over the break-even sales volume 1. Contribution b. Sum of fixed cost and profit 2. Cost volume profit analysis c. Break-even chart 3. Unaffected by change in output d. Break-even point 4. Margin of safety"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;a-4, b-1, c-2, d-3&#8243; option2=&#8221;a-4, b-3, c-2, d-1&#8243; option3=&#8221;a-4, b-3, c-1, d-2&#8243; option4=&#8221;a-3, b-1, c-4, d-2&#8243; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is: A. a-4, b-1, c-2, d-3<\/p>\n<ul>\n<li><strong>a. Excess of actual sales over the break-even sales volume<\/strong> (4) is the margin of safety. It is the amount by which actual sales exceed the break-even sales volume. It is a measure of the risk associated with a business.<\/li>\n<li><strong>b. Sum of fixed cost and profit<\/strong> (1) is the contribution. It is the amount of revenue that is available to cover variable costs and contribute to profit.<\/li>\n<li><strong>c. Break-even chart<\/strong> (2) is a graphical representation of the cost, revenue, and profit of a business. It can be used to identify the break-even point and to analyze the impact of changes in costs, prices, and volume on profit.<\/li>\n<li><strong>d. Break-even point<\/strong> (3) is the point at which a business&#8217;s revenue equals its costs. It is the point at which a business neither makes a profit nor incurs a loss.<\/li>\n<\/ul>\n<p>Here is a more detailed explanation of each option:<\/p>\n<ul>\n<li><strong>a. Excess of actual sales over the break-even sales volume<\/strong> (4) is the margin of safety. It is the amount by which actual sales exceed the break-even sales volume. It is a measure of the risk associated with a business. The margin of safety is calculated as follows:<\/li>\n<\/ul>\n<p>Margin of safety = Actual sales &#8211; Break-even sales<\/p>\n<p>For example, if a business has actual sales of $100,000 and a break-even sales volume of $80,000, then the margin of safety is $20,000. This means that the business has $20,000 in sales that it can lose before it starts to incur a loss.<\/p>\n<ul>\n<li><strong>b. Sum of fixed cost and profit<\/strong> (1) is the contribution. It is the amount of revenue that is available to cover variable costs and contribute to profit. The contribution is calculated as follows:<\/li>\n<\/ul>\n<p>Contribution = Selling price per unit &#8211; Variable cost per unit<\/p>\n<p>For example, if a business sells a product for $10 per unit and has a variable cost of $6 per unit, then the contribution is $4 per unit. This means that for every unit that the business sells, it has $4 available to cover fixed costs and contribute to profit.<\/p>\n<ul>\n<li>\n<p><strong>c. Break-even chart<\/strong> (2) is a graphical representation of the cost, revenue, and profit of a business. It can be used to identify the break-even point and to analyze the impact of changes in costs, prices, and volume on profit. A break-even chart is typically created by plotting the following on a graph:<\/p>\n<\/li>\n<li>\n<p>Total costs<\/p>\n<\/li>\n<li>Variable costs<\/li>\n<li>Fixed costs<\/li>\n<li>Revenue<\/li>\n<li>Profit<\/li>\n<\/ul>\n<p>The break-even point is the point at which the total costs line intersects the revenue line. The break-even point can be calculated algebraically as follows:<\/p>\n<p>Break-even point = Fixed costs \/ Contribution per unit<\/p>\n<p>For example, if a business has fixed costs of $10,000 and a contribution per unit of $4, then the break-even point is 2,500 units. This means that the business must sell 2,500 units before it starts to make a profit.<\/p>\n<ul>\n<li><strong>d. Break-even point<\/strong> (3) is the point at which a business&#8217;s revenue equals its costs. It is the point at which a business neither makes a profit nor incurs a loss. The break-even point can be calculated algebraically as follows:<\/li>\n<\/ul>\n<p>Break-even point = Fixed costs \/ Contribution per unit<\/p>\n<p>For example, if a business has fixed costs of $10,000 and a contribution per unit of $4, then the break-even point is 2,500 units. This means that the business must sell 2,500 units before it starts to make a profit.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;a-4, b-1, c-2, d-3&#8243; option2=&#8221;a-4, b-3, c-2, d-1&#8243; option3=&#8221;a-4, b-3, c-1, d-2&#8243; option4=&#8221;a-3, b-1, c-4, d-2&#8243; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-59463","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Match the following. List-I List-II a. Excess of actual sales over the break-even sales volume 1. Contribution b. Sum of fixed cost and profit 2. 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