As a general rule of economics, companies should only produce and sell units as long as ________. A. the revenue from an additional unit exceeds the cost of producing it B. there is customer demand for the product C. there is a relatively small supply of the product when compared to past operating periods D. there is a generous supply of low-cost direct materials

As a general rule of economics, companies should only produce and sell units as long as ________. A. the revenue from an additional unit exceeds the cost of producing it B. there is customer demand for the product C. there is a relatively small supply of the product when compared to past operating periods D. there is a generous supply of low-cost direct materials

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 3TP: As a manager, you have to choose between two options for new production equipment. Machine A will...

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As a manager, you have to choose between two options for new production equipment. Machine A will increase fixed costs by a substantial margin but will produce greater sales volume at the current price. Machine B will only slightly increase fixed costs but will produce considerable savings on variable cost per unit. No additional sales are anticipated if Machine B is selected. What are the relative merits of both machines, and how could you go about analyzing which machine is the better investment for the company in terms of both net operating income and break-even?
1.Which of the following is true if a company can accept a special order without affecting its regular sales and is within plant capacity? Group of answer choices Net income will increase if the special sales price per unit exceeds the unit variable costs. Net income will not be affected. Additional fixed costs will probably be incurred. Net income will decrease.
1. Due to change in market conditions a company finds that it can sell as many of each of its three main products as it can produce. Which one of the following is most important in determining which of the three products to produce and market? * a. Sales price per unit b. Contribution margin per unit c. Contribution margin per hour of production time available d. Sales price less full absorption cost per hour of production time available 2. In analyzing CVP, the margin of safety is a. Only expressed in peso amounts b. The difference between the breakeven sales and the fixed cost c. The amount of sales which may be reduced without resulting to a loss d. An amount which shows how much profit a company has past the breakeven point 3. Once a firm exceeds the indifference point, between an option to invest in machinery and equipment (highly automated) and an option to invest in manual labor (manual), which is true? * a. Fixed costs will be the same in two options b. Investing in labor…
Company XYZ sells two products: AAA and BBB. Product BBB has a lower selling price but higher contribution margin compared to product AAA. Assume that the factory has fixed production capacity. If Company XYZ decided to produce and sell more units of product BBB compared to product AAA, which one of the following is likely to happen? Select one: O a. Total profit will increase O b. Total profits will decrease Oc. None of the given answers d. Total sales will increase e. Total profits will remain the same
Please reject this A firm manufactures a product that sells for $16 per unit. Variable cost per unit is $8 and fixed cost per period is $1760 Capacity per period is 1400 units (a) Develop an algebraic statement for the revenue function and the cost function (b) Determine the number of units required to be sold to break even. (c) Compute the break-even point as a percent of capacity (d) Compute the break-even point in sales dollars (a) The revenue function is TR= (Type an expression using x as the variable Do not inciude the $ symbol in your answer) The cost function is TC (Type an expression using x as the variable Do not includo the $ symbol in your answer) (b) The number of units required to be sold to break even is units (Round up to the nearest whole number) (c) The break-even point as a porcent of capacity is% (Round to two decimal places as needed.) (d) The break-even point in sales dollars is $ (Round to the nearest cent as needed.)
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.
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1) what is the breakeven selling price per unit for Product A? 2) For product C, assume the selling price cannot change., what variable cost per unit will result in breakeven at 150 units sold? 3) what is the breakeven unit sales for Product F. Do not give answer in image
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