Break-Even Sales and Cost-Volume- Cor noin
Q: If Mazoon Company sells unit outputs below the breakeven point_ O a. total sales revenue will be…
A: The breakeven point is the production level at which the production cost equals the revenues from…
Q: Margin of safety is computed as Select one: O a. Contribution margin - Fixed costs O b. Breakeven…
A: Margin Of Safety is the difference between Break Even Sales and Actual Sales
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: The High- low method is used for? A. Profit planning B. Splitting mixed cost into fixed cost and…
A: A mixed cost contains a fixed portion of cost incurred even when the facility is idle, and a…
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: Under variable costing, how is it possible to increase net operating income without increasing sales
A: Introduction:- Under the Variable costing includes only variable manufacturing costs such as direct…
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: Calculate: a) The break-even level of production and sales b) The margin of safety
A: Given in the question: Per Desk Amount Direct Materials €3.00 Direct Labour…
Q: Break-even analysis assumes that: Multiple Choice Total revenue is constant. Unit variable expense…
A: Break even point: The point at which there will be no profit or loss for the company. At this…
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: Contribution margin divided by Income is the: Muftiple Chalce 11 Contribution margin ratio. Margin…
A: contribution margin is calculated by = contribution /sales. This ratio help the companies to…
Q: Briefly explain the impact of each of the following scenarios on the break-even point and the margin…
A:
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: Multiple-Product Break-Even and Target Profit
A: 1. Sales mix of ceiling fans to table fans = 30000:60000 = 1:2 2. Calculation of Breakeven point…
Q: ) Briefly explain the impact of each of the following scenarios on the break-even point and the…
A: Break even point is the point of sales where business earns no profit no loss.
Q: When the volume of production is higher than the volume of production at break-even point, than the…
A: Answer - Correct Option is Option C) current amount of profit
Q: If XYZ Company sells unit outputs that exceed the breakeven point, a. there will be an increase in…
A: CVP investigation takes a goose at the impact of deals volume minor departure from prices and…
Q: If Mazoon Company sells unit outputs below the breakeven point O a. there will be a loss b. total…
A: break even point is a situation where the company will be in a stage of no profit and no loss. Every…
Q: g) Briefly explain the impact of each of the following scenarios on the break-even point and the…
A: Margin of Safety(Amount) : Total Revenue-Breakeven point Margin of Safety(Units) : Current Sales…
Q: Briefly explain the impact of each of the following scenarios on the break-even point and the margin…
A: The break even sales units are the sales where business earns no profit no loss during the period.
Q: Is there any way to show high net operating income without increasing sales under the absorption…
A: A method of costing that involves consideration of all the manufacturing costs for calculation of…
Q: Break-even analysis attempts to determine the volume of sales necessary for a manufacturer to cover…
A: Break-even point: The point of sales where the situation of No Profit No Loss comes is called…
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: in a cost volume profit analysis explain what happen at the break even point and why company do not…
A: Cost volume profit analysis: It is a technique that analyses the effect of cost and volume on…
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: Contribution margin is sales less Star
A: Variable cost can be defined as the cost which is incurred on the production of goods. The value of…
Q: Contribution margin per unit is the amount by which a product's unit selling price exceeds its…
A: Selling price: Selling price is a price set by the supplier at which he is ready to sell his goods.…
Q: An increase (decrease) in cost of sales due to volume of *
A: Cost of Sales Cost of sales which is described as the cost which are incurred at the time of sales…
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: The term 'break even' point is defined as when: A. fixed costs equal total revenues B. variable…
A: The formula for calculating the break even point in units: Break Even Point (in Units)=Fixed…
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: g) Briefly explain the impact of each of the following scenarios on the break-even point and the…
A: Margin of safety: The excess of actual sales over the break-even sales is known as margin of safety.…
Q: Sales Less: Cost of goods so Fixed overhead cos Variable production Cost of goods sold Gross margin…
A: The question is based on the concept of Cost Accounting.
Q: Why is it common to assume a fixed sales mix before finding the break even volume with multiple…
A: Break-even analysis is the easiest form of cost-volume-profit analysis. Break-even analysis is used…
Q: :The traditional (Volume-based cost systems) tend t low-volume products and under-cost high-volume…
A: Explanation: In traditional volume-based cost system, direct material and direct labour cost are…
Q: The cost-volume-profit analysis for a breakeven chart does not assume Group of answer choices Some…
A: Contribution means the difference between the selling price and variable cost . Fixed cost remain…
Q: The break-even level of sales represents the point where: fixed costs, variable costs, and…
A: Break even level of sales indicates the level where total sales are equal to total cost i.e total of…
Q: What is the break-even point in sales units? (see attached)
A: Given:
Q: Break-even analysis attempts to determine the volume of sales necessary for a manufacturer to cover…
A: Variable costs are those costs that change with the change in the activity level. On the other hand,…
Q: In cost-volume-profit analysis, what is the estimated profit at the break-even point?
A: Cost volume profit analysis is useful to find out the different sales volume on the basis of…
Q: The margin of safety can be defined as the excess of budgeted sales over: break-even sales. net…
A: Cost-volume profit analysis: It can be defined as a cost accounting method that shows the impact of…
Q: Based on the facts of Easy Problems Corp. The margin of safety ratio (MSR) and the break-even sales…
A: Solution Given Selling price per unit 25 Less Variable cost per unit (15)…
Q: In a cost-volume-profit analysis, explain what happens at the break-even point and why companies do…
A: Break-even point: It is that point in the business when all its costs have been recovered.…
Q: At break even point: a) sales - contribution margin = net income or net loss b) sales - fixed…
A: breakeven point = no profit and no loss situation for the company. the breakeven point is where the…
Q: Explain how a shift in the sales mix could result in both a higher break-even point and a lower…
A: Sales mix involves the composition of different products and some products have a higher margin of…
Step by step
Solved in 2 steps with 2 images
- Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?Cost-Volume-Profit, Margin of Safety Victoria Company produces a single product. Last years income statement is as follows: Required: 1. Compute the break-even point in units and sales dollars calculated using the break-even units. 2. What was the margin of safety for Victoria last year in sales dollars? 3. Suppose that Victoria is considering an investment in new technology that will increase fixed cost by 250,000 per year but will lower variable costs to 45% of sales. Units sold will remain unchanged. Prepare a budgeted income statement assuming that Victoria makes this investment. What is the new break-even point in sales dollars, assuming that the investment is made?Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
- Contribution margin, break-even sales, cost-volume-profit chart, margin of safety, and operating leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: It is expected that 12,000 units will be sold at a price of 240 a unit. Maximum sales within the relevant range are 18,000 units. Instructions 1. Prepare an estimated income statement for 20Y7. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart indicating the break-even sales. 5. What is the expected margin of safety in dollars and as a percentage of sales? (Round to one decimal place.) 6. Determine the operating leverage.Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals 78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the sales revenue that Chillmax must make to earn operating income of 81,900 by using the point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.