10. Brasher Company manufactures and sells a single product that has a positivecontribution margin. If both the selling price and variable cost decrease by 10% andfixed expenses do not change, then what would be the effect on the contributionmargin per unit and the contribution margin ratio?Contribution margin Contribution marginper unitratioA.DecreaseDecreaseB.DecreaseNo changeC.No changeDecreaseD.No changeNo change

Contribution margin means the difference between sales and the variable expenses. Contribution…

Answered: 10. Brasher Company manufactures and…

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter20: Variable Costing For Management Analysis

Section: Chapter Questions

Problem 20.10EX

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Which of the following would produce no change in the contribution margin per unit? Select one: a. A 14% increase in variable cost. b.A 7% increase in selling price. CA 15% decrease in selling price. d. None of the given of answers. A 23% increase in the number of units sold.
Tower Company manufactures and sells a single product with a positive contribution margin. If the selling price and the variable cost per unit both increase 5% and fixed costs do not change, what is the effect on the contribution margin per unit and the contribution margin ratio? Contribution margin per unit Contribution margin ratio A. No change No change B. Increase Increase C. Increase No change D. Increase Decrease Option A Option B Option C Option D
NUBD Co. manufactures and sells a single product. If the selling price and variable costs both decrease by 5% and fixed costs do not change, then the unit contribution margin will decrease and the contribution margin ratio will decrease the unit contribution margin will decrease and the contribution margn ratio will remain the same the unit contribution margin will remain unchanged and contribution margin ratio will decrease neither the unit contribution margin nor the contribution margin ratio will change
1. Which of the following formulas is used to calculate break-even units? Fixed Costs ÷ Unit Contribution Margin Variable Costs ÷ Contribution Margin Percent Variable Costs ÷ Unit Contribution Margin Fixed Costs ÷ Contribution Margin Percent 2. What effect does the increase in fixed costs have on the break-even units? Decrease Increase No-effect None of these choices are correct. 3. If a company decides to increase the selling price of its product, what is its effect on break-even point? Decrease Increase No-effect None of these choices are correct.
All else being equal, a $10.00 increase in a product's variable expense per unit accompanied by a $10.00 increase in its selling price per unit will: Select one: O a. have no effect on the total contribution margin. b. have no effect on the contribution margin ratio. O c. None of the given answers. O d. increase the break-even volume. O e decrease the degree of operating leverage.
Which of the following is true regarding the contribution margin ratio of a company that produces only a single product? Select one: a. The contribution margin ratio equals the selling price per unit less the variable expense ratio. b. The contribution margin per unit multiplied by the selling price per unit equals the contribution margin ratio. c. None of the given answer is correct. d. As fixed expenses decrease, the contribution margin ratio increases. e. The contribution margin ratio will decline as unit sales decline.
If both the fixed costs associated with a product and the variable costs (as apercentage of sales dollars) decrease, what will be the effect on the contribution margin ratio and the break-even point, respectively?a. Decrease, increase.b. Increase, decrease.c. Decrease, decrease.d. Increase, increase.
g) Briefly explain the impact of each of the following scenarios on the contribution margin per unit and the break-even point:(i) Sales volume increases(ii) Total fixed cost decreases(iii) Selling price per unit increases(iv) Variable cost per unit increases
Given the following information, answer thequestions:• The ratio of variable cost per unit divided by selling price per unit equals 0.3.• Fixed costs amount to $60,000.(a) Draw the cost-volume-profit chart.(b) What is the break-even point?(c) What effect would an 8% decrease in sellingprice have on the break-even point from part (b)?
Massey Company reported the following data regarding the product it sells: Sales price $ 25 Contribution margin ratio 40 % Fixed costs $ 810,000 Massey Company reported the following data regarding the product it sells: Sales Price: $25 Contribution margin ratio: 40% fixed cost: 810,000 Required Use the contribution margin ratio approach and consider each requirement separately. If the sales price increases to $30 and variable costs do not change, what is the new break-even point in dollars? In units?
(2) Ice Cold Ltd has a current breakeven point of 50,000 units. Which of the following would result in an increase to the breakeven point?a. a decrease in the variable costs per unitb. a decrease in the contribution margin per unitc. an increase in the selling price per unitd. a decrease in the fixed costs
Wenthorp Enterprises decreased the selling price for its product from $10.00 to $9.00 a unit when total fixed costs decreased from $200,000 to $150,000 and variable cost per unit of $ 5 remained unchanged. How would these changes affect the break-even point? a. The break-even point in units would be increased b. The break-even point in units would be decreased c. The break-even point in units would remain unchanged d. The effect cannot be determined from the information given.

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