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1. Which of the following is NOT a primary method of cost analysis in finance management?

  • Break-even analysis
  • Market research analysis
  • Cost-volume-profit analysis
  • Activity-based costing

2. Break-even analysis helps determine the point where:

  • Profits are maximized
  • Revenue equals expenses
  • Variable costs exceed fixed costs
  • Market share is highest

3. What does CVP analysis stand for?

  • Cost-Value-Profit analysis
  • Cost-Volume-Profit analysis
  • Capital-Value-Profit analysis
  • Cash-Volume-Profit analysis

4. Activity-based costing (ABC) focuses on:

  • Allocating overhead costs based on volume
  • Allocating overhead costs based on activities
  • Ignoring overhead costs entirely
  • Only considering direct costs

5. A cost that changes in direct proportion to changes in activity levels is called a:

  • Fixed cost
  • Variable cost
  • Sunk cost
  • Opportunity cost

6. Which cost remains constant regardless of the production volume?

  • Variable cost
  • Mixed cost
  • Fixed cost
  • Marginal cost

7. What is a major limitation of using the high-low method for cost analysis?

  • It is too complex to calculate.
  • It only uses two data points.
  • It doesn't consider fixed costs
  • It requires sophisticated software

8. Cost accounting primarily helps in:

  • Investing in the stock market
  • Managing financial risk
  • Determining the cost of products or services
  • Raising capital

9. A sunk cost is:

  • A future cost
  • A recoverable cost
  • An irrecoverable cost
  • A variable cost

10. Marginal cost represents:

  • The cost of producing one more unit
  • The average cost of production
  • The total cost of production
  • The fixed cost of production

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