Cost-Volume-Profit Analysis: Definition & Examples

Instructions:

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question 1 of 3

A company sells 5000 units at $25 each. If the variable costs are $35,000, what is the contribution margin ratio?

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1. Helen wants to sell her product for $100. It costs her $74 to make. How much is Helen's profit?

2. What must be true about profit to use it in the cost-volume-profit model?

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About This Quiz & Worksheet

A cost-volume-profit analysis is used by businesses to determine how much of a product should be made and the price at which it should be sold. Our professional instructors have composed this assessment to provide you with a way to measure your understanding of the components of cost-volume-profit analysis.

Quiz & Worksheet Goals

Use this assessment to test your understanding of:

  • The cost-volume-profit formula
  • Cost-volume-profit models
  • Unit contribution margins

Skills Practiced

Other skills this assessment tests include:

  • Information recall - access the knowledge you've gained regarding cost-volume-profit analysis
  • Knowledge application - use your knowledge to identify elements of the cost-volume-profit formula
  • Reading comprehension - ensure that you draw the most important information on how to determine the unit contribution margin

Additional Learning

This assessment comes with a short and effective lesson titled Cost-Volume-Profit Analysis: Definition & Examples. You may complete this lesson to improve your understanding of the following topics:

  • How cost-volume-profit analyses are used in business
  • The variables of the cost-volume-profit formula
  • How to calculate contribution margin ratios
  • An example of a cost-volume-profit analysis
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