Chapter 3

Question 1

Volume level where profits equal zero

Answer 1

Break-Even Point

Question 2

Contribution margin as a percentage of sales revenue

Answer 2

Contribution Margin Ratio

Question 3

Proportion of fixed and variable costs to total costs of an organization

Answer 3

Cost Structure

Question 4

Study of the relations among revenues, costs, and volume and their effect on profit

Answer 4

Cost-Volume-Profit (CVP) Analysis

Question 5

The excess of projected or actual sales over the break-even volume

Answer 5

Margin of Safety

Question 6

The excess of projected or actual sales over the break-even volume expressed as a percentage of break-even volume

Answer 6

Margin of Safety Percentage

Question 7

Extent to which an organization’s cost structure is made up of fixed costs

Answer 7

Operating Leverage

Question 8

Operating profit equals total revenue less total costs

Answer 8

Profit Equation

Question 9

Version of cost-volume-profit analysis using a single profit line

Answer 9

Profit-Volume Analysis

Question 10

Difference between revenues and total variable costs

Answer 10

Total Contribution Margin

Question 11

Difference between revenues per unit (Price) and variable cost per unit

Answer 11

Unit Contribution Margin