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2 Contribution Margin Online Quiz Questions

Use this free practice quiz with 20 questions to review 2 Contribution Margin, test your knowledge, and prepare for your next test or exam.

20 questions
01
True or false
1 point

True or false: Contribution margin is the amount of sales revenue left after variable costs are deducted.

  1. A

    True

  2. B

    False

02
Fill in the blank
1 point

Contribution margin first covers ; any remaining amount becomes .

03
Choose one
1 point

A product sells for $72\$72 per unit and has variable cost of $45\$45 per unit. What is its contribution margin per unit?

  1. A

    $17

  2. B

    $27

  3. C

    $45

  4. D

    $72

04
True or false
1 point

True or false: A contribution-format income statement groups costs by behavior, such as variable or fixed, rather than by function.

  1. A

    True

  2. B

    False

05
Fill in the blank
1 point

In a contribution-format income statement, sales less variable costs equals . After fixed costs are deducted, the result is .

06
Choose one
1 point

A company has total sales of $80,000\$80{,}000 and total contribution margin of $32,000\$32{,}000. What is its contribution margin ratio?

  1. A

    25%

  2. B

    40%

  3. C

    60%

  4. D

    150%

07
Choose all
1 point

Select all correct statements about contribution margin and cost-volume-profit planning.

  1. A

    It shows the share of each sales dollar available for fixed costs and operating income.

  2. B

    It is calculated by dividing fixed costs by sales.

  3. C

    Under the usual cost-volume-profit assumptions, each additional unit sold adds its unit contribution margin to operating income.

  4. D

    It is the same amount as operating income in every period.

08
Written response
1 point

A single-product company has fixed costs of $18,000\$18{,}000 and unit contribution margin of $30\$30. How many units must it sell to break even? Enter the number of units.

09
Written response
1 point

A company sells 900 units, each with a contribution margin of $16\$16. What is its total contribution margin? Enter the amount in dollars.

10
Choose one
1 point

A company sells 1,200 units for $40\$40 each. Variable cost is $25\$25 per unit, and fixed costs are $12,000\$12{,}000. What is operating income for the period?

  1. A

    $3,000

  2. B

    $5,000

  3. C

    $6,000

  4. D

    $18,000

11
Choose all
1 point

Select all correct formulas for a single product.

  1. A

    Break-even units equal fixed costs divided by unit contribution margin.

  2. B

    Break-even units equal unit contribution margin divided by fixed costs.

  3. C

    Sales dollars for target operating income equal fixed costs plus target operating income, divided by the contribution margin ratio.

  4. D

    Sales dollars for target operating income equal target operating income divided by fixed costs.

12
Written response
1 point

A single-product company has fixed costs of $14,000\$14{,}000, a target operating income of $7,000\$7{,}000, and a contribution margin ratio of 35%. How much sales revenue is needed to reach the target? Enter the amount in dollars.

13
Open ended
1 point

A company sells one product for $50\$50 per unit, has variable cost of $30\$30 per unit and fixed costs of $14,000\$14{,}000, and wants operating income of $10,000\$10{,}000. Calculate the unit contribution margin, units needed, and sales dollars needed. Briefly state what must hold for these estimates to be useful.

14
Choose one
1 point

Which sequence correctly describes how a contribution-format income statement calculates operating income?

  1. A

    Sales, less fixed costs, less variable costs, equals contribution margin.

  2. B

    Sales, less variable costs, equals contribution margin; less fixed costs, equals operating income.

  3. C

    Sales, less operating income, equals fixed costs; less variable costs, equals contribution margin.

  4. D

    Variable costs, less sales, equals fixed costs; less contribution margin, equals operating income.

15
True or false
1 point

True or false: If fixed costs increase by $3,500 while sales revenue and variable costs stay the same, operating income decreases by $3,500.

  1. A

    True

  2. B

    False

16
Choose one
1 point

A product sells for 86 dollars per unit and has variable costs of 53 dollars per unit. What is its contribution margin per unit?

  1. A

    20 dollars

  2. B

    33 dollars

  3. C

    53 dollars

  4. D

    139 dollars

17
Choose one
1 point

A business has total sales of 120,000 dollars and total contribution margin of 42,000 dollars. What is its contribution margin ratio?

  1. A

    28%

  2. B

    30%

  3. C

    35%

  4. D

    42%

18
Choose one
1 point

A company sells 850 units, and each unit has a contribution margin of 16 dollars. What is the total contribution margin?

  1. A

    10,400 dollars

  2. B

    12,800 dollars

  3. C

    13,400 dollars

  4. D

    13,600 dollars

19
Choose one
1 point

A company has fixed costs of 18,000 dollars and a unit contribution margin of 24 dollars. How many units must it sell to break even?

  1. A

    600 units

  2. B

    700 units

  3. C

    750 units

  4. D

    1,000 units

20
Written response
1 point

A company has fixed costs of 24,000 dollars and a unit contribution margin of 13 dollars. How many units must it sell to earn 15,000 dollars in operating income? Enter the number of units.