HMD 340 CHAPER 7 EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
What is CVP Analysis? - Answers Analytical tools used to determine the revenue at any desired profit
level
Operating Analysis - Answers An operation's expenses are fixed rather than variable.
High Operating Leverage - Answers high level of fixed costs relative to variable costs.
Low Operating Costs - Answers high level of variable costs relative to fixed costs.
Contribution Margin - Answers The amount of sales revenue that goes toward fixed costs and profits.
The difference between selling price and variable cost per unit - Answers Contribution Margin
Margin Safety - Answers the excess of budgeted or actual sales over sales at breakeven.
Sensitivity Analysis - Answers The study of the sensitivity of the CVP model's dependent variables
(such as room sales) to changes in one ore more of the model's independent variables (such as
variable costs and selling prices).
Breakeven Point - Answers The point at which gains equal losses.
The level of sales volume at which total revenues
equal total costs. - Answers Breakeven Point
Fixed costs remain fixed - Answers Assumptions of CVP Analysis
Variable costs fluctuate in a linear fashion with
revenues - Answers Assumptions of CVP Analysis
Revenues are directly proportional to volume - Answers Assumptions of CVP Analysis
Mixed costs can be divided into their fixed and variable elements - Answers Assumptions of CVP
Analysis
All costs can be assigned to individual operated
departments - Answers Assumptions of CVP Analysis
CVP model considers only quantitative factors—no
qualitative factors - Answers Assumptions of CVP Analysis
Determining Break Even Point - Answers Uses of CVP
The effect of changes of revenue on bottom line - Answers Another use of CVP
Profit at any given volume of activity - Answers CVP use
What is CVP Analysis? - Answers Analytical tools used to determine the revenue at any desired profit
level
Operating Analysis - Answers An operation's expenses are fixed rather than variable.
High Operating Leverage - Answers high level of fixed costs relative to variable costs.
Low Operating Costs - Answers high level of variable costs relative to fixed costs.
Contribution Margin - Answers The amount of sales revenue that goes toward fixed costs and profits.
The difference between selling price and variable cost per unit - Answers Contribution Margin
Margin Safety - Answers the excess of budgeted or actual sales over sales at breakeven.
Sensitivity Analysis - Answers The study of the sensitivity of the CVP model's dependent variables
(such as room sales) to changes in one ore more of the model's independent variables (such as
variable costs and selling prices).
Breakeven Point - Answers The point at which gains equal losses.
The level of sales volume at which total revenues
equal total costs. - Answers Breakeven Point
Fixed costs remain fixed - Answers Assumptions of CVP Analysis
Variable costs fluctuate in a linear fashion with
revenues - Answers Assumptions of CVP Analysis
Revenues are directly proportional to volume - Answers Assumptions of CVP Analysis
Mixed costs can be divided into their fixed and variable elements - Answers Assumptions of CVP
Analysis
All costs can be assigned to individual operated
departments - Answers Assumptions of CVP Analysis
CVP model considers only quantitative factors—no
qualitative factors - Answers Assumptions of CVP Analysis
Determining Break Even Point - Answers Uses of CVP
The effect of changes of revenue on bottom line - Answers Another use of CVP
Profit at any given volume of activity - Answers CVP use
