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Exam IIA-CIA-Part3 topic 2 question 74 discussion

Actual exam question from IIA's IIA-CIA-Part3
Question #: 74
Topic #: 2
[All IIA-CIA-Part3 Questions]

Which of the following statements is true regarding cost-volume-profit analysis?

  • A. Contribution margin is the amount remaining from sales revenue after fixed expenses have been deducted.
  • B. Breakeven point is the amount of units sold to cover variable costs.
  • C. Breakeven occurs when the contribution margin covers fixed costs.
  • D. Following breakeven, net operating income will increase by the excess of fixed costs less the variable costs per units sold.
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Suggested Answer: A 🗳️
Reference:
https://courses.lumenlearning.com/acctmgrs/chapter/5-3-the-contribution-margin-income-statement/#:~:text=The%20contribution%20margin%
20represents%20sales,%2C%20the%20name%20contribution%20margin

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MarkWang
Highly Voted 3 years, 7 months ago
THE ANSWER IS C LOTS OF ERROR ABOUT THIS TOPIC
upvoted 6 times
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Elvin
Most Recent 9 months, 2 weeks ago
Selected Answer: C
Please correct this. It should be C
upvoted 2 times
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SAA1
3 years, 9 months ago
as per the link - the correct definition is "The contribution margin represents sales revenue left over after deducting variable costs from sales. It is the amount remaining that will contribute to covering fixed costs and to operating profit (hence, the name contribution margin)." Pls correct the answer.
upvoted 4 times
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