a. How can the mathematical equation for break-even sales show both sales units and sales dollars? b. How do the formulas differ for unit contribution margin and contribution margin ratio? c. How can contribution margin be used to determine break-even sales in units and in dollars?

a. How can the mathematical equation for break-even sales show both sales units and sales dollars? b. How do the formulas differ for unit contribution margin and contribution margin ratio? c. How can contribution margin be used to determine break-even sales in units and in dollars?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 15MC: If the sales mix in a multi-product environment shifts to a higher volume in low contribution margin...

See similar textbooks

Related questions

Q: Briefly explain the impact of each of the following scenarios on the contribution margin per unit…

A: Formula: Contribution margin per unit = Selling price per unit – Variable cost per unit.…

Q: Which of the following is true regarding the contribution margin ratio of a single product company?…

A: 1. Contribution Margin Ratio - It is calculated by following formula - = (Total Revenue - Variable…

Q: Which of the following is not correct? At break-even A. Fixed costs equals contribution margin B.…

A: Break even point means where there is no profit no loss. Variable cost means the cost which vary…

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: To calculate the sales dollars necessary to achieved a desired profit level, the sum of fixed costs…

A: The break even sales are the sales where business earns no profit no loss during the period.

Q: Prepare an analysis of the sales quantity and unit price factors did the price decrease generate…

A: Sales quantity factor = (Actual Quantity - planned Quantity) * Planned Sales Price Sales quantity…

Q: a. How can the mathematical equation for break-even sales show both sales units and sales dollars?

A: The analysis for cost, volume and profit in an organization is called Cost-Volume-Profit analysis.…

Q: What is the effect of an increase in variable costs as a percentage of sales onthe contribution…

A: Variable cost refers to the cost which varies according to the volume of produced units. Increase in…

Q: The unit contribution margin is calculated as the difference between: a. selling price and fixed…

A: 1) Option B is correct i.e. selling price and variable cost per unit. Reason :- Unit contribution…

Q: g) Briefly explain the impact of each of the following scenarios on the contribution margin per unit…

A: Contribution margin per unit is the sales revenue over and above variable costs in the business.…

Q: On the cost- volume -profit graph , the area between the total cost line and the sales line before…

A: Cost-volume-profit graph represents the sales line, total cost line, variable cost, fixed costs and…

Q: Contribution is the difference between sales and the marginal (variable) cost of sales

A: Contribution = Sales - Variable cost

Q: Which of the following would not affect the break-even point? number of units sold…

A: Break Even Point - Break even point is the point where company has no profit no loss situation.…

Q: Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs…

A: Cost volume profit analysis is also known as CVP analysis. It shows how profits of the organisation…

Q: The dollar amount of sales needed to achieve a target operating income is computed by…

A: The contribution margin is calculated as excess of sales revenue over variable expenses.

Q: Which of the following formulas is used to calculate break-even point in units? a.Break-even point…

A: Selling price per unit: It is the price at which a unit of product is sold in the market. Variable…

Q: What is the contribution margin per unit? contribution margin ratio? Unit sales at break even…

A: Hey, since there are multiple requirements posted, we will answer the first three requirements. If…

Q: Explain the difference between the economist Cost-Volume-Profit (CVP) analysis model and the…

A: The difference in in economic cost value model and accountant cost value model is:- accountant argue…

Q: 22) Which of the following expressions can be used to calculate break-even sales revenue with the…

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

Q: Analyse the diagram and following inter related concepts of break-even analysis. A. Break-even point…

A: Break Even Analysis: It is the point where total cost is equal to revenue and It determine the…

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: a. What is the company's break-even point in unit sales? Break even point units b. Is it above or…

A: Break even sales is the sales level at which an entity is able to recover all its costs that is the…

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: Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs…

A: Cost - volume - profit analysis It is used to determine the changes in cost and volume of sales…

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: Which of the following statement is CORRECT about the foundational assumption used in CVP analysis.…

A: CVP analysis means the cost-volume profit analysis. This analysis in cost management is done to have…

Q: the following best explains the difference between the two points on the graph? * Q O The area of…

A: The cost volume profit analysis is performed to represent the effect of different cost on Income and…

Q: :The variable cost ratio is calculated as contribution margin ratio - (the selling price per…

A: Variable cost Ratio= Variable Cost per unit/ Selling price per unit

Q: Break-even is the number of units at which? a. total revenue equals price times quantity b. total…

A: The break even sales are the sales where business earns no profit no loss during the period. The…

Q: Of the three approaches to calculate sales required to achieve the breakeven point, which one(s)…

Q: Sometimes management prefers that the break-even point be expressed in sales dollars rather than…

A: Break-even Point - It is a point at which revenues of a company are equal to the total expense of a…

Q: Which of the following would not be an acceptable way to express contribution margin? * 100% minus…

A: The correct option is fourth. As the formula of dividing variable cost by sales revenue is used for…

Q: How do you calculate Break-even Point? Select one: a. Fixed cost/ Contribution per unit b.…

A: Break-even point: The break-even point refers to a point where the total cost is equal to the total…

Q: On the cost-volume-profit graph, which of the following would result into an increase in the…

A: Break even point in units = Fixed costs / (Selling price per unit - Variable cost per unit

Q: Compute the variable cost ratio 2. Compute the contribution ratio 3. Compute the break-even point…

A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…

Q: Help question 30

A: The contribution margin ratio shows the percentage of each dollar sales that is available for…

Q: Which of the following is true regarding the contribution margin ratio of a company that produces…

A: Contribution margin ratio=Contribution per unitSales price per unit Contribution per unit = Sales…

Q: The unit contribution margin is computed by ⦁ subtracting the variable cost per unit from the…

A: Variable costs are the costs that tend to change with the change in production level.

Q: What does the term sales mix mean? How is a weighted-average unit contribution margin computed?

A: Contribution Margin is defined as the difference between the sales and the variable cost. In other…

Q: The break-even point in CVP analysis is defined as the point 1) where output units equal input…

A: A Break-even point is a level of sales at which there is no profit or loss. Hence, at the break-even…

Q: Help4

A: Break-even point for a business is that position for a business where the difference between the…

Q: An analyst is constructing a simple model to determine the gross and net profit of a product, given…

A: Gross profit means the difference between the sale revenue and cost of goods sold where as net…

Q: What's the expected profit at break-even in a cost-volume-profit analysis

A: Introduction : The cost volume profit analysis examines the relationship between the variable and…

Q: Briefly explain the impact of each of the following scenarios on the contribution margin per unit…

A: Contribution Margin per unit refers to the excess value over the variable expenses per unit when…

Q: Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs…

A: Option b is correct.

Question

100%

its cost accounting question

Please answer

CT18.4 Your roommate asks for your help on the following questions about CVP analysis
formulas.
a. How can the mathematical equation for break-even sales show both sales units and sales
dollars?
b. How do the formulas differ for unit contribution margin and contribution margin ratio?
c. How can contribution margin be used to determine break-even sales in units and in
dollars?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Jackson Corporation has asked you to analyze their sales and cost data. They have provided you with the below dashboard: Determine the unit contribution margin and contribution margin ratio. Unit Contribution Margin = Contribution Margin ratio = Calculate the break-even point in units and sales dollars. Note: Round your answers to the nearest whole number. Break-Even Units = Break-Even Sales Dollars = Compute Jackson’s margin of safety in units and as a percentage of sales. Note: Round your intermediate calculations to the nearest whole number. Round your final percentage of sales answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34). Margin of Safety in units = Margin of Safety as a percentage of sales =
g) Briefly explain the impact of each of the following scenarios on the break-even point and the margin of safety:(i) Increase in sales volume(ii) Increase in total fixed costs(iii) Increase in selling price per unit(iv) Decrease in variable costs per unit
g) Briefly explain the impact of each of the following scenarios on the break-even point and the margin of Safety: (i) Increase in sales volume (ii) Increase in total fixed costs (iii) Increase in selling price per unit (iv) Decrease in variable costs per unit
Which of the following is not an assumption underlying cost-volume-profit analysis?a. The sales mix is constant.b. The break-even point will be passed during the period.c. Total sales and total costs can be represented by straight lines.d. Costs can be accurately divided into fixed and variable components.
Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs are linear b. Sales mix of products sold does not change c. Selling price per unit changes with volume d. Costs can be divided into variable and fixed components e. Fixed cost per unit is not constant
Which of the following is NOT a use of CVP (Cost-Volume-Profit) analysis? a.what is the impact on the break-even point of an increase or decrease in fixed costs b.how many units must be sold to break even c.the identification of price and efficiency variances d.the ability to conduct sensitivity analysis of cost or price changes
Based on the facts of Easy Problems Corp. The margin of safety ratio (MSR) and the break-even sales ratio (BESR) are?
In order to draw a basic break-even chart, which of the following information would you not require? Selling price Margin of safety Variable cost per unit Fixed cost
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.
Which of the following formulas is used to calculate break-even point in units? a.Break-even point in units = Total fixed costs / (Price − Unit variable cost) b.Break-even point in units = Total costs / Unit contribution margin c.Break-even point in units = Sales / Unit variable cost d.Break-even point in units = Sales / Fixed costs
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
Which one of the following is not an assumption of CVP analysis? The behavior of costs and revenues are linear within the relevant range. Sales mix remains constant. All units produced are sold. All costs are variable costs.