22) Which of the following expressions can be used to calculate break-even sales revenuewith the contribution-margin ratio (CMR)?A) CMR x fixed costsB) (Sales revenue -variable costs) +CMR.O Fixed costs - CMR.D) CMR - fixed costs.E) (Fixed costs + variable costs) x CMR.

Break-even analysis is a technique used widely by production management. It helps to determine the…

22) Which of the following expressions can be used to calculate break-even sales revenue with the contribution-margin ratio (CMR)? A) CMR - fixed costs B) (Sales revenavariable costs)CMR. O Fixed costs CMR. D) CMR fixed costs E (Fixed costs variable costs) CMR.

22) Which of the following expressions can be used to calculate break-even sales revenue with the contribution-margin ratio (CMR)? A) CMR - fixed costs B) (Sales revenavariable costs)CMR. O Fixed costs CMR. D) CMR fixed costs E (Fixed costs variable costs) CMR.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 11MC: When should a segment be dropped? A. only when the decrease in total contribution margin is less...

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Question

22) Which of the following expressions can be used to calculate break-even sales revenue
with the contribution-margin ratio (CMR)?
A) CMR x fixed costs
B) (Sales revenue -variable costs) +CMR.
O Fixed costs - CMR.
D) CMR - fixed costs.
E) (Fixed costs + variable costs) x CMR.

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Discuss the two factors affecting both sales and variable costs to which a change in contribution margin can be attributed.
The amount of a units sales price that helps to cover fixed expenses is its ____________________. A. contribution margin B. profit C. variable cost D. stepped cost
Discuss the two factors affecting both sales and variable costs to which a change in contribution margin can be attributed.
When should a segment be dropped? A. only when the decrease in total contribution margin is less than the decrease in fixed cost B. only when the decrease in total contribution margin is equal to fixed cost C. only when the increase in total contribution margin is more than the decrease in fixed cost D. only when the decrease in total contribution margin is less than the decrease in variable cost
Which of the following is a correct definition of the margin of safety? The excess of contribution margin over fixed costs The excess of gross margin over target income 0 The excess of sales revenue over the breakeven point The excess of ner income over all costs (both variable and fixed
Which of the following statements about determining the breakeven point is FALSE? a) Breakeven revenues equal fixed costs divided by the variable cost per unit. b) Revenues equal fixed costs plus variable costs. c) Operating income is equal to zero. d) Contribution margin minus fixed costs is equal to zero.
Which of the following is NOT correct about Contribution concept? Select one: a. Contribution can be calculated by using total values or per-unit values. b. Contribution helps to recover fixed costs of the company. c. Contribution is the difference between sales and fixed costs. d. At break-even point, contribution is equal to fixed costs.
The contribution margin ratio can be calculated in all of the following ways except: a.1 − Variable cost ratio. b.Contribution margin per unit / Price. c.Total contribution margin / Total sales. d.Fixed costs / Contribution margin ratio. e.All of these choices are correct. Total contribution margin divided by total sales is the: a.contribution margin ratio. b.sales ratio. c.target income. d.margin of safety. e.indifference point.
g) Briefly explain the impact of each of the following scenarios on the contribution margin per unit and thebreak-even point:(i) Sales volume increases(ii) Total fixed cost decreases(iii) Selling price per unit increases(iv) Variable cost per unit increases
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
Which of the following is not an assumption underlying cost-volume-profit analysis? a.The break-even point will be passed during the period. b.Total sales and total costs can be represented by straight lines. c.Costs can be accurately divided into fixed and variable components. d.The sales mix is constant.
1. The formula used to calculate the number of units needed in order to earn a target income is a. (Fixed costs + variable costs) / Sales b. (Fixed costs + target income) / Sales c. (Fixed costs + target income) / CM per unit d. (Fixed costs + variable costs) / CM per unit 2. The indifference point is reached when * a. The savings in variable cost is equal to the increase in fixed costs. b. The savings in variable cost is less than the increase in fixed costs. c. The savings in fixed cost is equal to the decrease in variable cost. d. The savings in fixed cost is more than the increase in variable costs.' 3. Which of the following is not an assumption used to prepare a cost-volume-profit graph? * a. Constant sales mix b. Constant cost fluctuations c. Units produced equal units sold d. Liner costs within the relevant range