Income taxes have the following effect on the breakeven point calculation:   Multiple Choice   They have no effect on the breakeven point.   They may increase or decrease the breakeven point, depending on the cost structure of the organization.   They generally increase the breakeven point.   They increase the variable cost per unit.   They generally decrease the breakeven point.

Q: Which of the following is a limitation of the gross profit variance analysis? a. The level of…

A: Gross profit variance analysis refers to the analysis which dealt with how to analyse the profit…

Q: Explain the meaning of (a) differential revenue, (b) differential cost, and (c) differential income.…

A: “Since you have posted a question with multiple questions, we will solve the first three questions…

Q: How can managers determine the breakeven point or the output needed to achieve a target operating…

A: Lets start with the basic understanding of break even point. Break even point is a point at which…

Q: Which of the following statements about margin of safety is false? a. Margin of safety measures the…

A: margin of safety is that much sales is above the break even point sales.

Q: True or False: The Earned Income Tax Credit (EITC) is expected to increase labour supply on both the…

A: The given statement is True.. The EITC is expected to increase the labour supply of both the…

Q: Break-even analysis is of limited use to management because a company cannot survive by just…

A: Breakeven analysis involves comparison of fixed cost, variable cost and sales price to derive the…

Q: With regard to the CVP graph, which of the following statements is NOT correct? a. The CVP graph…

A: Cost volume profit (CVP) graph : A cvp graph shows the break even point as the intersection of the…

Q: Which of the following will result in the increasing the break-even point? O A decrease in the…

A: Break-even point = Fixed costs / Contribution per unit Contribution per unit = Selling price per…

Q: Which of the following is NOT true regarding an income statement organized according to the…

A: An income statement is a financial statement that tracks both corporate revenue and expenses over a…

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

A: The question is multiple choice question. The question is related to Marginal Costing and is of cost…

Q: Which of the following statements about margin of safety is false? O a. If the variable cost per…

A: Margin of safety is calculated as excess of current sales revenue over break even sales.

Q: What analysis ensures that the income for the firm will cover its variable costs?    a. ratio…

A: Companies need to analyse how many products to sell or how much sales to make in a financial year to…

Q: In a multi-product company, as the mix of the products being sold changes, the overall contribution…

A: Overall contribution margin is the mix of individual contribution margin with the weights of their…

Q: Which of the following statements is most correct about step costs?  they have the same behaviour…

A: Marginal costing is the one by which the cost of additional unit production is calculated. Under…

Q: Which of the following would lead to the breakeven point of a product shifting to the left on a…

A: Break-even analysis is done in order to find out at what point the total cost will be equal to the…

Q: Which of the following occurs if a company experiences a decrease in its fixed costs? Select one: O…

A: Contribution margin = Selling price - variable cost Break even point = Fixed cost / Contribution…

Q: Which of the following is NOT correct about Contribution concept? Select one: a. Contribution can…

A: 1. Contribution can be computed on total basis and per unit basis 2. contribution helps in…

Q: In what way can the use of ROI as a performance measure for investment centers lead to bad…

A: ROI:   It is a measure on the amount of return on a particular investment with respect to the…

Q: In all respects, Company A and Company B are identical except that Company A’s costs are mostly…

A:

Q: ?Which of the following statements about margin of safety is false .Margin of safety measures the…

A: The MOS is the difference between the budgeted sales or actual sales and the break-even sales. It…

Q: Which of the following would reduce net profit margin but have no effect on gross profit  margin? a)…

A: a) Commission paid to salesmen is a selling expense charged against net profit .b) Purchase price…

Q: In the cost-volume-profit analysis, income taxes a.increase the sales volume required to break even.…

A: Cost-volume-profit analysis is used inorder to analyse the relation between profits of the entity…

Q: Explain how a shift in the sales mix could result in both a higher break-even point and a lower net…

A: Sales mix involves the composition of different products and some products have a higher margin of…

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: Monopolists sometimes practice price discrimination to O a. get rid of surplus product. O b,…

A: Correct answer:Option d:Increase profit

Q: Which of the following statements about CVP analysis is false? O a. Unit selling price, unit…

A: CVP analysis appearance at the impact of sales volume variations on prices and operative profit. The…

Q: The labor supply curve   a. may slope either upward or downward, depending upon the real wage…

A: The correct option is  B. slopes downward to illustrate that a decrease in the real wage decreases…

Q: What would NUBD Corp. have reported as its income before income taxes if it had used variable…

A: Formula: Income before income tax under variable costing = Net income ( absorption Method ) - Fixed…

Q: True (t) or False (f) ______ Use of LIFO provides a tax benefit in an industry where unit costs…

A: Income = Sales - Cost of goods sold   Under the LIFO method, the cost of goods sold includes the…

Q: Which of the following is true of fixed and variable costs? Volume changes will not change the…

A: Fixed cost includes expenses that remain constant irrespective of the level of outputs, like rent,…

Q: A company's break-even point will  not be changed by:

A: Break-even point i Break-even point is a level of activity where no profit is gained and no loss…

Q: Which of the following statements about CVP analysis is false? O a. Operating income calculations in…

A: CVP analysis estimates the how much the changes in a company's cost, both fixed and variable, sales…

Q: The direct costing method is important because: a) allows the calculation of the break-even point…

A: The cost which is incurred directly into the product is called direct costing for example direct…

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 not another way of describing the marginal propensity to consume? a.…

A: Slope of the consumption function would not describe marginal propensity to consume.

Q: When applying lower of cost or net realizable value under the FIFO, average cost, or specific…

A: The lower of cost or net realizable value method says we should record the inventory at market price…

Q: Which of the followings is not correct about cost-based pricing? Select one: a. Total fixed costs…

A: Cost based pricing is the method to set selling price based on the cost. To get selling price,…

Q: Which of the following occurs if a company experiences an increase in its fixed costs? Select one: O…

A: Fixed cost indicates the cost which remains constant to a certain level of activity after which the…

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: 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.…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.