AQA A Level · Accounting 7127

Marginal Costing: Practice Questions

4 multiple-choice questions marked as you go, and 3 written questions with worked solutions. All on Marginal Costing.

7 questions11 marksFree, no account

Question 1

1 mark

A company has the following cost structure for a single product:
Selling price: \(£25\) per unit
Variable costs: \(£15\) per unit
Fixed costs: \(£40,000\)

What is the contribution per unit?

Question 2

1 mark

A manufacturing company is considering a special order for \(1,000\) units. The following information is available:
Normal selling price: \(£50\) per unit
Variable production cost: \(£20\) per unit
Variable selling cost: \(£5\) per unit
Fixed overheads (allocated): \(£10\) per unit

The special order would not incur any variable selling costs and the company has spare capacity. What is the minimum price per unit the company should charge to break even on this specific order?

Question 3

1 mark

Which of the following is the correct formula to calculate the break-even point in units?

Question 4

1 mark

A business produces a single product with a contribution to sales (C/S) ratio of \(40\%\). If the total fixed costs are \(£60,000\), what is the break-even point in sales revenue?

Question 5

2 marks

State the formula used to calculate the break-even point in sales revenue.

Write your answer out first, then check it against the worked solution.

Question 6

3 marks

A business currently sells \(2,000\) units. If the break-even point is \(1,400\) units, calculate the margin of safety as a percentage of current sales.

Write your answer out first, then check it against the worked solution.

Question 7

2 marks

A business has fixed costs of \(£15,000\) and a contribution per unit of \(£25\). Calculate the break-even point in units.

Write your answer out first, then check it against the worked solution.

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