1. CVP analysis cannot be used to make decisions about a specific department if it has joint costs.

A. True

B. False

2. A restaurant has sales revenue of 500,000 dollars, variable costs of 200,000 dollars, and fixed costs of 200,000 dollars. The owner wants net income after tax of 40,000 dollars. The tax rate is 30%. What is the operating income (before tax)?

A. $133,333

B. $ 57,143

C. $ 17,143

D. $ 40,000

3. When dealing with a problem using the CVP equation for a motel that receives rent from leasing out its restaurant, the rent income in the equation is:

A. Added to profit

B. Deducted from fixed costs

C. Added to the room sales revenue

D. Deducted from variable costs

4. A restaurant specializes in a seafood buffet serving dinner only, at a price of 15.75 dollars per person. Its average variable cost is 6.30 dollars per person. The fixed cost is 6,000 dollars per month. How many buffet meals must be served monthly to break even if they are open 20 days per month?

A. 32

B. 380

C. 635

D. 952