Cost behaviour and break-even analysis
- Created by: josief95
- Created on: 13-12-15 13:37
Other questions in this quiz
2. Contribution margin ratio =
- contribution / cost revenue x 100%
- contribution / sales revenue x 100%
- contribution / fixed cost per unit x 100%
- contribution / cost of sales x 100%
3. Semi-Variable Cost or Semi-Fixed Cost
- It is a mixture of fixed and variable cost
- Remain constant (fixed) when changes occur to the volume of activity then changes
- Vary according to the volume of activity
4. Minimum price a business should charge for a lorry (£10,000) fitted with new engine (£2500) which could be sold immediately for (£9,000)
- Opportunity cost + Engine cost
- Historic cost (£10'000) + Engine cost (£2500)
- Historic cost (£10'000) + Engine cost (£2500) - Opportunity cost
5. Weaknesses of break-even analysis:
- Linear relationships, flat rate fixed costs, Multi-product businesses
- Non-linear relationships, Stepped fixed costs, Multi-product businesses
- Linear relationships, curved fixed costs, Multi-product businesses
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