Source checked · Professional review pending. 20 CVP foundation questions, with explanations. Each attempt reorders the same collection; this is not a full Management Services mock exam.
Practice the 20-question CVP collection
Source checked on 2026-10-19; professional review pending. This draft is a 20-question CVP foundations collection. Another attempt reorders the same 20 items. It does not cover all Management Services or certify current PRC syllabus alignment. Professional review and rights clearance are pending. Source checking does not constitute professional approval.
What you will practice
Single-product cost–volume–profit fundamentals
Included in this foundation set
- Unit and total contribution margin
- Contribution margin ratio and statement format
- Break-even units and sales revenue
- Target operating profit
- Margin of safety in pesos, units and percentage
- One-variable sensitivity
- Whole-unit rounding and relevant-range assumptions
Outside this set
- Comprehensive CPALE or Management Services coverage
- Official syllabus weighting or exam alignment certification
- Tax law, after-tax targets and legal requirements
- Operating leverage
- Multi-product sales mix and constrained-resource optimization
- Human professional approval or official exam-body endorsement
Model assumptions
- Unless a question explicitly changes an input, selling price per unit and variable operating cost per unit remain constant over the relevant range.
- Total fixed operating costs remain constant within the relevant range unless a question explicitly changes those costs or capacity.
- All amounts in a question refer to the same stated period; all units produced are sold and inventory does not change.
- Each numerical model concerns a single product; capacity is sufficient at all calculated volumes unless the question asks about capacity.
- Profit means operating profit before interest and income tax; no tax rule or tax rate is asserted.
- Peso amounts are hypothetical teaching inputs. Whole-unit minimum-sales requirements round upward; do not round intermediate ratios.
Three worked CVP examples
These separately authored workshop examples explain the method before you attempt the questions. Expand each calculation.
Build the contribution margin, then find break-even
A workshop sells one product for ₱280. Variable operating cost is ₱168 per unit and monthly fixed operating costs are ₱336,000.
- Unit contribution margin = ₱280 − ₱168 = ₱112.
- Contribution margin ratio = ₱112 ÷ ₱280 = 40%.
- Break-even volume = ₱336,000 ÷ ₱112 = 3,000 units; sales revenue = 3,000 × ₱280 = ₱840,000.
Result: 3,000 units or ₱840,000 monthly sales revenue.
Arithmetic check: ₱840,000 − (3,000 × ₱168) − ₱336,000 = ₱0.
Method references: 3.1 — Unit Contribution Margin; Contribution Margin Ratio; Total Contribution Margin; 3.2 — CVP assumptions; Sales Where Operating Income Is $0; target-profit analysis. Source checked; professional review pending.
Add the operating-profit target before dividing
A workshop sells one product for ₱280 per unit, with variable operating cost of ₱168 per unit and monthly fixed operating costs of ₱336,000. It wants monthly operating profit of ₱112,000.
- Contribution margin must cover ₱336,000 of fixed costs plus ₱112,000 of operating profit.
- Required units = (₱336,000 + ₱112,000) ÷ ₱112 = 4,000.
- Required sales revenue = 4,000 × ₱280 = ₱1,120,000.
Result: 4,000 units or ₱1,120,000 monthly sales revenue.
Arithmetic check: 4,000 × ₱112 − ₱336,000 = ₱112,000 operating profit.
Method references: 3.2 — CVP assumptions; Sales Where Operating Income Is $0; target-profit analysis. Source checked; professional review pending.
Measure the sales cushion using a consistent unit
A workshop sells one product for ₱280 per unit, with variable operating cost of ₱168 per unit and monthly fixed operating costs of ₱336,000. It actually sells 5,000 units in a month; break-even is 3,000 units.
- Margin of safety = 5,000 − 3,000 = 2,000 units.
- In pesos: 2,000 × ₱280 = ₱560,000.
- Margin of safety percentage = 2,000 ÷ 5,000 = 40%.
Result: 2,000 units, ₱560,000, or 40% of actual sales.
Arithmetic check: Actual revenue ₱1,400,000 − break-even revenue ₱840,000 = ₱560,000.
Method references: 3.5 — Margin of Safety: definition and percentage formula. Source checked; professional review pending.
Common mistakes to check
Contribution margin is not operating profit
Subtract variable costs to find contribution margin. Then subtract fixed operating costs to find operating profit.
A ratio is not a peso amount
Divide fixed costs by margin per unit for units, or by the contribution margin ratio for sales revenue.
Use the right base for margin of safety
The percentage uses actual sales as its base when the question says actual sales. Keep both quantities in pesos or both in units.
Fixed costs have a capacity limit
A fixed-cost estimate holds within its relevant range. Added capacity can require a new estimate.
Sources and review status
AI-assisted source and arithmetic checking compared the methods and calculations against the publisher pages below. A second machine source check saw answer-related derivations before recording solutions; it was not a blind independent review. No professional reviewer has approved this draft.
- OpenStax, Rice University: 3.1 — Unit Contribution Margin; Contribution Margin Ratio; Total Contribution Margin ↗
Contribution margin = sales − variable costs; unit margin and ratio; subtract fixed costs to obtain operating income.
Principles of Accounting, Volume 2: Managerial Accounting. Published 2019-02-14; checked 2026-10-19.
- OpenStax, Rice University: 3.2 — CVP assumptions; Sales Where Operating Income Is $0; target-profit analysis ↗
Break-even units and sales revenue, target operating-profit equations, constant price/unit variable cost and relevant-range assumptions.
Principles of Accounting, Volume 2: Managerial Accounting. Published 2019-02-14; checked 2026-10-19.
- OpenStax, Rice University: 3.3 — Change in Variable Cost; Change in Fixed Cost; Table 3.1 ↗
Recalculate break-even after a fixed- or unit-variable-cost change while holding other inputs constant.
Principles of Accounting, Volume 2: Managerial Accounting. Published 2019-02-14; checked 2026-10-19.
- OpenStax, Rice University: 3.5 — Margin of Safety: definition and percentage formula ↗
Margin of safety = actual sales − break-even sales; percentage uses actual sales as the denominator.
Principles of Accounting, Volume 2: Managerial Accounting. Published 2019-02-14; checked 2026-10-19.
References support methods only; textbook assessments and figures were not copied. Fourteen adapted questions still require upstream authorship and licensing evidence. Source checking does not establish permission to publish.
Content revision: 2026-10-19-cvp-r1. Professional reviewer and approval date: pending.
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