Describe the components of contribution margin.

Q: Define and explain the contribution margin ratio.

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

Q: Define cost behaviour.

A: High-Low Method: The high-low method is the method by which the variable component and the fixed…

Q: total contribution .margin

A: Total contribution margin = Total sales - Total variable cost

Q: Explain difference between prime costs and conversion costs.

A: Prime cost: It is the cost which is incurred for manufacturing a product. It includes direct…

Q: Define the following terms: (a) cost behavior and (b) relevant range.

A: Cost behavior and relevant range are terms under cost accounting. Cost behavior studies the pattern…

Q: What is the contribution margin percentage?

A: Contribution Margin: The Contribution Margin is also can be treated on a gross or per unit basis.…

Q: Define the term contribution margin.

A: Contribution margin is defined as the term which determines the profitability of the individual…

Q: Explain the usefulness of contribution margin and responsibility margin in making short-term…

A: Decision-making process: Decision making can be defined as the process of making choices through…

Q: Distinguish betweenproduct costs and periodcosts and give examplesof each.

A: Product cost: The product cost relates to the manufacturing costs such as direct material, direct…

Q: What costs are assigned to a segment under the contribution approach?

A: Contribution approach is approach used to present income statement in which all the variable costs…

Q: Define and distinguish between contribution margin per unit and contribution margin percentage?

A: Contribution margin is the difference between the total revenue and total variable costs of a…

Q: what is the definition and significance of contribution margin ratio

A: Contribution margin ratio Contribution margin ratio is also profit-volume ratio. It helps us to…

Q: Define the term contribution margin ratio.

A: Contribution margin is the measure of ability of the company to cover its variable costs with the…

Q: Define and describe contribution margin per unit.

A: Contribution margin:   Contribution margin refers to the process or theory that is used to judge the…

Q: How is contribution margin calculated?

A: Contribution margin means sales revenue over and above the variable costs of production and selling…

Q: What does the Unit contribution margin express?

A: Break Even Point:                 Break Even Point is defined as the level where there is no profit…

Q: Define cost allocation?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Explain Classifying Costs for Predicting Cost Behavior?

A:

Q: Write the equation for the Contribution margin?

A: Cost volume profit analysis: CVP analysis established the relation between cost, volume, and profit…

Q: Define the following terms: incremental cost, opportunity cost, and sunk cost.

A: Incremental Analysis: Incremental analysis refers to the analysis of differential revenue that could…

Q: Explain an example how to calculate contribution margin ratio.

A: Contribution margin ratio:   Contribution margin ratio is the difference between the company’s sales…

Q: Define sunk cost

A: Companies when making crucial decisions about their operations consider relevant costs i.e. costs…

Q: Explain how to prepare contribution margin income statement.

A: Contribution margin:   Contribution margin refers to the process or theory that is used to judge the…

Q: Express the two ways of contribution margin?

A: Contribution margin is the difference between the sales revenue and the variable costs.

Q: explain the importance of cost behavior

A: Cost behavior refers to any change in the behavior of cost due to change in the level of output or…

Q: Define cost pool?

A: Step 1 The amount of money expended on producing a particular product is referred to as cost. Direct…

Q: Describe the concepts of contribution margin, relevant range, and relevant costs

A: Solution:- Analysis the concepts of contribution margin, relevant range, and relevant costs as…

Q: Distinguish between Contribution Margin and Break-Even Volume?

A: Contribution margin:   This is the price of a product less all the associated variable cost that…

Q: Contribution margin is

A: The formula Contribution= sales - variable cost

Q: Define prime cost and conversion cost.

A: Prime cost and conversion cost are the two most important concepts of cost accounting. These…

Q: Define the following terms: differential cost, sunk cost, and opportunity cost.

A: Differential cost:  Differential cost is the change in total cost due to increase or decrease in…

Q: Explain the difference between target price and target cost.

A:

Q: Define contribution margin, contribution margin per unit, and contribution margin percentage.

A: Contribution Margin: The contribution margin is the excess of selling price over the variable costs…

Q: Describe the Define the term Benefit-Cost Ratio?

A: Cost benefit analysis is a quantitative approach used by top level management to evaluate the…

Q: Explain an example how to calculate total costs.

A: Total c osts represents overall costs incurred to produce or procure a product.

Q: Explain contribution margin.

A: Contribution Margin is the amount of revenue available after variable costs to cover fixed expenses…

Q: Explain the benefits of standard costs.

A: Standard costs means budgeted or predetermined cost for a unit of a business. For example, in…