Marginal Costing

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Marginal Costing

Attempt the ten questions below and then click 'Submit'.

Q1. Apart from a Sales Commission of 10% of Sales, our Selling and Administration expenses are a Fixed Cost. If our Sales figure is €442,000 and the total Selling and Administration Expenses are €94,500, how much of the Selling and Administration Expenses are a Fixed Cost? *

10 points

€44,200

€9,450

€50,300

€85,050

Q2. Fixed Costs are €240,000. Selling Price is €6. Total Variable Costs are €120,000 and 30,000 products are sold. What is the Break-Even Point? *

10 points

120,000 Units

60,000 Units

80,000 Units

40,000 Units

Q3. Using the figures from Q2, if the current sales volume is 160,000 units, what is the Margin of Safety? *

10 points

100,000 Units

60,000 Units

80,000 Units

40,000 Units

Q4. Using the figures from Q2, how many units would need to be sold to make a total profit of €60,000? *

10 points

30,000 Units

80,000 Units

60,000 Units

150,000 Units

Q5. Using the figures from Q2, how many products would need to be sold in order to make a profit of €1 on each sale? *

10 points

80,000 Units

240,000 Units

120,000 Units

160,000 Units

Q6. Contribution is... *

10 points

Selling Price Minus Fixed Costs

Selling Price Minus Variable Costs

Selling Price Minus Variable and Fixed Costs

Q7. On a Break-Even Chart, the Break-Even Point is visible where... *

10 points

The Revenue and Fixed Costs lines cross

The Total Costs and Fixed Costs lines cross

The Revenue and Variable Costs lines cross

The Revenue and Total Costs lines cross

Q8. Spending an extra 50c per unit on improved packaging, would be an example of... *

10 points

A Variable Cost

A Fixed Cost

A Revenue

A Contribution

Q9. What is the Contribution Sales Ratio? *

10 points

Sales divided by Variable Costs

Sales divided by Fixed Costs

Sales divided by Contribution

Sales divided by Total Costs

Q10. Marginal Costing... *

10 points

Predicts our monthly income and expenditure for the next portion of the year

Records the costs of producing our products over the last year

Calculates the unit cost of making one item from our product range

Shows how profit and break-even points might be affected when changes are made to output, revenue or costs

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