Practice Key Concepts in Marginal Costing - 22.9 | 22. Break-even Analysis and Marginal Costing | Management 1 (Organizational Behaviour/Finance & Accounting)
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22.9 - Key Concepts in Marginal Costing

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the formula for calculating marginal cost?

💡 Hint: Think about how costs increase when production increases.

Question 2

Easy

Define contribution in your own words.

💡 Hint: Consider what portion of sales goes towards fixed costs and profit.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What is marginal cost?

  • Total cost of production
  • Additional cost for one more unit
  • Cost of fixed factors

💡 Hint: Focus on the term 'additional' related to unit production.

Question 2

True or False: Contribution is calculated as Selling Price minus Fixed Costs.

  • True
  • False

💡 Hint: Consider what costs contribute to the product pricing structure.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company produces 1,000 units of a product. The fixed costs are ₹200,000, the variable cost per unit is ₹100, and the selling price is ₹200. Calculate the profit if production increases to 1,200 units while the selling price and variable costs remain unchanged.

💡 Hint: Remember to calculate total contributions and then subtract fixed costs.

Question 2

A firm has fixed costs of ₹75,000 and a contribution margin of ₹150 per unit. How many units must the firm sell to break even?

💡 Hint: To find the break-even point, divide fixed costs by contribution per unit.

Challenge and get performance evaluation