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Fundamentals of Financial Management, Concise Edition10th EditionEugene F. Brigham, Joel Houston 777 solutions Which of the following is not correct? At break-even A. Fixed costs equals contribution margin B. Profit equals zero C. Sales equal total costs D. Gross profit equals zero Q: Which of the following is NOT true of variable costing? a. Profits may increase though sales… A: Variable costing is a concept used in managerial and cost accounting in which the fixed… Q: All else being equal, what happens to the unit contribution margin and the contribution margin ratio… A: Contribution Margin = Sales per unit - Variable cost per unit Q: In the CVP analysis, Which of the following statements about the breakeven point is true? a.… A: Cost volume profit analysis is useful to find out the different sales volume on the basis of… Q: All else being equal, what happens to the unit contribution margin and the contribution margin ratio… A: Contribution margin is calculated as Sales less variable costs. Sale price is the price at which the… Q: Which of the following statements is CORRECT with respect to fixed costs per unit? Select one: A.… A: Fixed costs are those costs which do not change with change in level of activity. For example,… Q: The break-even point is that level of activity where: Select one: a. sales revenue equals fixed… A: Break Even point is a level where Profit is Zero Q: The total contribution margin is equivalent to the combined net profit and fixed costs. It can be… A: Solution: The total contribution margin is equivalent to the combined net profit and fixed costs =… Q: Which of the following would not affect the breakeven point? O a. A change in variable cost per unit… A: Break even point can be referred to as a sales level at which the firm is just able to recover all… Q: a. How can the mathematical equation for break-even sales show both sales units and sales dollars?… A: Click to see the answer Q: Which of the following does not represent a cost-volume-profit analysis equation? O a. Sales - fixed… A: Cost-volume-profit equation: Profit = Revenue – Fixed Costs – Variable Costs Q: All else being equal , what happens to the unit contribution margin and the contribution margin… A: Contribution Margin: The process or theory which is used to judge the benefit given by each unit of… Q: What is happening to average costs when marginal cost is greater than average cost at a specific… A: When marginal cost is greater than average cost (including average variable cost or average total… Q: How do costs behave when there is a change in volume? a) ______ increases or decreases in total in… A: Hi student SInce there are multiple questions, we will answer only first question. Since first… Q: All else being equal, what happens to the unit contribution margin and the contribution margin ratio… A: Contribution Margin is sales less variable costs. Contribution Margin ratio = Contribution margin /… Q: Which of the following is a correct definition of the margin of safety? The excess of contribution… A: Margin of safety: Margin of safety is the point at which company makes profit. In other words Margin… Q: The break-even point is where total sales equal total variable costs. True B) False A: Break-even point is the point at which company’s revenues which are earned during the year are equal… Q: With regard to the CVP graph, which of the following statements is NOT correct? a. The CVP graph… A: Cost volume profit (CVP) graph : A cvp graph shows the break even point as the intersection of the… Q: Which of the following do not increase or decrease when the volume of production changes? O a. Fixed… A: Some cost do not get affected by the volume of production. It remains same at all the levels of… Q: On the cost-volume-profit graph, the area between the total cost line and the sales line before the… A: on the cost volume profit graph, the area between the total costline and the sales line before the… Q: Which of the following is NOT true regarding an income statement organized according to the… A: An income statement is a financial statement that tracks both corporate revenue and expenses over a… Q: when total contribution margin equals total fixed cost this indicates operating income true false A: First we understand contribution margin Contribution margin means Variable cost deduct from Sales… Q: when total contribution margin equals total fixed cost this indicates operating income true false A: Formula: Contribution margin = sales Revenues - variable cost Deduction of variable cost from sales… Q: Which one of the following is not considered an assumption of cost-volun O a. Fixed cost per unit is… A: Option E is the correct answer i.e Cost can be Divided into variable and fixed components. Q: Contribution margin Select one: O a. excludes variable selling costs from its calculation. O b.… A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which… Q: Which of the following is true of the contribution margin ratio? a.If the contribution margin… A: The contribution margin indicates the excess of revenue over its variable cost. It also indicates… Q: Which of the following is true of fixed and variable costs? Volume changes will not change the… A: Fixed cost includes expenses that remain constant irrespective of the level of outputs, like rent,… Q: On the cost-volume-profit graph, the area between the total cost line and the sales line after the… A: CVP analysis helps in determining the effect of variation in the costs on the profitability of an… Q: What is the Breakeven formula when a profit is included: Group of answer choices c. Fixed Costs –… A: Break-even point is the point at which there is no loss or no profit. It is because the sales… Q: Which of the following does not represent a cost-volume-profit analysis equation? O a. Contribution… A: Cost-volume profit analysis is a tool that helps in decision making by establishing a relationship… Q: On the cost-volume-profit graph, the area between the total cost line and the sales line before the… A: This is part of break-even analysis. Q: Which of the following occurs if a company experiences a decrease in its fixed costs? Select one: O… A: Break even point: It is calculated by dividing the fixed cost by the contribution margin ratio. Q: In the CVP analysis, at the point of breakeven O a. total contribution margin minus total fixed… A: The break even sales units are the sales where business earns no profit no loss. Q: The contribution margin ratio always increases when the: a. Break-even point increases. b.… A: Contribution Margin ratio = (Sales Revenue per Unit - Variable Expenses per Unit) / Sales Revenue… Q: Margin of safety ratio is computed by dividing excess of actual or budgeted sales from break- even… A: Margin of safety ratio = Profit ratio / Contribution margin ratio Q: The variable cost ratio is calculated as: а. The selling price per unit ratio / variable cost per… A: Variable cost = Variable manufacturing cost + Variable selling and administrative cost Q: Holding other factors constant, a company's contribution margin per unit will increase with: a. All… A: Contribution margin per unit is the value that can be determined by reducing the variable costs from… Q: Which of the following statements about CVP analysis is true? O a. Operating income calculations in… A: Selling price: Selling price is a price set by the supplier at which he is ready to sell his… Q: Holding other factors constant, a company's contribution margin per unit will increase with: O a.… A: Contribution margin is referred to as that portion of sales revenue which is not absorbed by the… Q: On the cost-volume-profit graph, which of the following would result into a decrease in the… A: Break even point is total fixed cost divided by contribution margin per unit. So break-even point… Q: What happens to average fixed cost as more products are made? a. Remains the same b. Increases c.… A: Total fixed cost remains same at all level of output. Q: Which of the following statements is correct: A. total fixed cost remain constant while variable… A: Fixed Costs: Total Fixed cost remains constant at all the level of activities. Fixed cost per unit… Knowledge Booster SEE MORE QUESTIONS Recommended textbooks for you Principles of Accounting Volume 2 ISBN:9781947172609 Author:OpenStax Publisher:OpenStax College Managerial Accounting: The Cornerstone of Busines... ISBN:9781337115773 Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger Publisher:Cengage Learning Principles of Cost Accounting ISBN:9781305087408 Author:Edward J. Vanderbeck, Maria R. Mitchell Publisher:Cengage Learning Cornerstones of Cost Management (Cornerstones Ser... ISBN:9781305970663 Author:Don R. Hansen, Maryanne M. Mowen Publisher:Cengage Learning Financial & Managerial Accounting ISBN:9781337119207 Author:Carl Warren, James M. Reeve, Jonathan Duchac Publisher:Cengage Learning Financial And Managerial Accounting ISBN:9781337902663 Author:WARREN, Carl S. Publisher:Cengage Learning, Principles of Accounting Volume 2 ISBN:9781947172609 Author:OpenStax Publisher:OpenStax College Managerial Accounting: The Cornerstone of Busines... ISBN:9781337115773 Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger Publisher:Cengage Learning Principles of Cost Accounting ISBN:9781305087408 Author:Edward J. Vanderbeck, Maria R. Mitchell Publisher:Cengage Learning Cornerstones of Cost Management (Cornerstones Ser... ISBN:9781305970663 Author:Don R. Hansen, Maryanne M. Mowen Publisher:Cengage Learning Financial & Managerial Accounting ISBN:9781337119207 Author:Carl Warren, James M. Reeve, Jonathan Duchac Publisher:Cengage Learning Financial And Managerial Accounting ISBN:9781337902663 Author:WARREN, Carl S. Publisher:Cengage Learning, |