When performing CVP analysis for a single product:
A) The contribution margin per unit can be used to solve for the breakeven point
B) The price per unit is always needed
C) Fixed costs are usually low
D) Operating leverage is usually high

Question

Quizplus · Accepted Answer

The contribution margin per unit is a key component in calculating the breakeven point in CVP analysis. Other information such as variable costs and fixed costs are also needed, but the price per unit is not always necessary as long as the contribution margin per unit and other relevant information are known. Fixed costs can vary depending on the company and the product being analyzed, and the level of operating leverage depends on the amount of fixed costs relative to variable costs. Therefore, choices C and D are not necessarily true statements for all situations.

When Performing CVP Analysis for a Single Product