If a company is a multiproduct firm. Group of answer choices
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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- #34 A calculation used in CVP analysis is the break-even point. At this point, total revenue equals total costs. Beyond the break-even point, operating income will increase by the Group of answer choices A. variable cost per unit for each additional unit. B. selling price per unit for each additional unit. C. contribution margin per unit for each additional unit. D. contribution margin per unit for each additional unit.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…1 Often the most direct route to a business decision is an incremental analysis. What is meant by an incremental analysis? 2 If the units produced equals the units sold, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why? 3 Should a company allocate its common fixed costs to business segments when computing the break-even point for those segments? Why? 4 If the units produced equals the units sold, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why?
- 5. Herman Corp. has two products, A and B, with the following total sales and total variable costs: Product A Product B P10,000 P30,000 Total Sales P 4,000 P24,000 Total Variable Costs What is the overall contribution margin ratio? 30% 50% 40% 70%____ 36. In contrast to the total product and variable cost concepts used in setting seller's prices, the target cost approach assumes that: a. a markup is added to total cost b. selling price is set by the marketplace c. a markup is added to variable cost d. a markup is added to product cost ____ 37. The profit margin for Division E is 28% and the investment turnover is 2.8. What is the rate of return on investment for Division E? a. 20% b. 28% c. 14% d. 78.4% ____ 38. If variable costs per unit decreased because of a decrease in utility rates, the break-even point would: a. decrease b. increase c. remain the same d. increase or decrease, depending upon the percentage increase in utility rates ____ 39. Nevitt Corp.’s static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, utilities of $5,000, and supervisor salaries of…2. Answer the following questions, considering each situation independently. You might not be able to answer the questions in the order they are asked. 1. A company earned $200,000 selling 100,000 units at $8 per unit. Its fixed costs are $400,000. A. What are variable cost per unit? Why? How? B. What is total contribution margin? Why? How? C. What would income be if sales increased by 5,000 units? Why? How?
- Q The XYZ Company has three major products, whose contribution margins are shown below in Table 1.1. Table 1.1. Presents description of the mixed products and related contribution margin Description Products Sales Price $ 13 $12 $6.5 Variable cost per unit 8 6 4 CM/Unit 5 6 2.5 Total fixed costs are $100,000. Question (a) the break-even point in units in total and for each product if the three products are sold in the proportions of 30%,50%, and 20%, and (b)the break-even point in total and for each product if the sales mix ratio changes to 50%, 30%, and 20%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 sameRefer to Cornerstone Exercise 15.3. Choctaw Company provides the following additional information so that total productivity can be valued: Required: 1. Calculate the cost of inputs in 20x2, assuming no productivity change from 20x1 to 20x2. 2. Calculate the actual cost of inputs for 20x2. What is the net value of the productivity changes? How much profit change is attributable to each inputs productivity change? 3. What if a manager wants to know how much of the total profit change from 20x1 to 20x2 is attributable to price recovery? Calculate the price-recovery component, and comment on its meaning.
- 1. Find the break-even point in terms of dollars. 2. Find the margin of safety in terms of dollars. 3. The company is considering decreasing product K's unit sales to 80,000 and increasing product L's unit sales to 180,000, leaving unchanged the selling price per unit, variable expense per unit, and total fixed expenses. Would you advise adopting this plan? Indicate the advantage or disadvantage of the new plan over the current operations. Ex. YES 12345 ADVANTAGE or NO 12345 DISADVANTAGE1. 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.