# How to Select a Cost Structure for CVP

Instructions:

question 1 of 3

### Identify the company that has the highest operating leverage.

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### 2. Calculate a company's break-even in unit given the following information: fixed costs = \$100,000; unit contribution margin = \$20; variable cost per unit = \$15.

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This quiz and worksheet deals with the considerations and factors of choosing cost structures for CVP. You'll be tested on how well you understand these factors as well as related calculations and components.

## Quiz & Worksheet Goals

The questions on this quiz/worksheet involve:

• High operating leverage
• Calculating contribution margin ratios and break-even points
• Selecting a cost structure
• Fixed cost

## Skills Practiced

• Problem solving - use acquired knowledge to solve practice problems involving relevant calculations
• Defining key concepts - ensure that you can accurately identify the qualities of high operating leverage as well as a representation of fixed cost
• Distinguishing differences - make sure you can accurately differentiate between factors that a company should and shouldn't consider when choosing cost structure