Question 1
The selling price per unit less the variable cost per unit is the ________.
◦ fixed cost per unit
◦ gross margin
◦ margin of safety
◦ contribution margin per unit
Question 2
Which of the following is an assumption of CVP analysis?
◦ Total costs can be divided into a fixed component and a component that is variable with respect to the level of output.
◦ When graphed, total costs curve upward.
◦ The unit-selling price is variable as it is subject to demand and supply.
◦ Total costs can be divided into inventoriable and period costs with respect to the level of output.