Net income will be: Greater if more higher-contribution margin units are sold than lower-contribution margin units. Greater if more lower-contribution margin units are sold than higher-contribution margin units. Equal as long as total sales remain equal, regardless of which products are sold. O Unaffected by changes in the mix of products sold. None of the above.

Net income will be: Greater if more higher-contribution margin units are sold than lower-contribution margin units. Greater if more lower-contribution margin units are sold than higher-contribution margin units. Equal as long as total sales remain equal, regardless of which products are sold. O Unaffected by changes in the mix of products sold. None of the above.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 15MC: If the sales mix in a multi-product environment shifts to a higher volume in low contribution margin...

See similar textbooks

Similar questions

Which of the following is true regarding the contribution margin ratio of a company that produces only a single product? Select one: a. The contribution margin ratio equals the selling price per unit less the variable expense ratio. b. The contribution margin per unit multiplied by the selling price per unit equals the contribution margin ratio. c. None of the given answer is correct. d. As fixed expenses decrease, the contribution margin ratio increases. e. The contribution margin ratio will decline as unit sales decline.
Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs are linear b. Sales mix of products sold does not change c. Selling price per unit changes with volume d. Costs can be divided into variable and fixed components e. Fixed cost per unit is not constant
CVP analysis with multiple products assumes that sales will continue at the same mix of products, expressed in either sales units or sales dollars. This assumption is essential, because a change in the product mix will probably change: Multiple Choice The average variable cost per unit. The average sales price per unit. The weighted-average contribution margin (per unit or ratio). The total fixed cost. The average contribution margin (per unit or ratio).
If the percentage change in operating income resulting from a given percentagechange in sales is higher than the percentage change in sales itself, thena. an increase in the selling price would not alter the contribution marginper unit.b. variable costs per unit have increased.c. variable costs have decreased in total.d. the company has operating leverage.e. the company has no fixed costs.
All else being equal , what happens to the unit contribution margin and the contribution margin ratio if the sales price per unit decrease ? Select one : a . Both unit contribution margin and contribution margin ratio are unchanged . . Both unit contribution margin and contribution margin ratio increase . c . Unit contribution margin increases while contribution margin ratio decreases . d . Unit contribution margin decreases and contribution margin ratio decreases . . None of the given answers .
All else being equal, what happens to the unit contribution margin and the contribution margin ratio if the sales price per unit decrease? Select one: O a. None of the given answers. O b. Both unit contribution margin and contribution margin ratio increase. O c. Unit contribution margin decreases and contribution margin ratio decreases. O d. Both unit contribution margin and contribution margin ratio are unchanged. O e. Unit contribution margin increases while contribution margin ratio decreases.
Which condition would cause absorption-costing net income to be greater than variable-costing net income? A. Units sold exceeded units produced B. Units sold equaled units produced C. Units sold were less than units produced. D. Sales prices decreased
A company manufactures a single product, product Y. It hasdocumented levels of demand at certain selling prices for thisproduct as follows: Demand Selling price per unit Cost per unit Units £ £ 1100 48 24 1200 46 21 1300 45 20 1400 42 19 Required:Using a tabular approach, calculate the marginal revenues andmarginal costs for product Y at the different levels of demand, andso determine the selling price at which the company profits aremaximized.
Which of the following is NOT true regarding an income statement organized according to thecontribution margin approach? Question 6 options: The contribution margin income statement is organized by cost behavior. Operating income will always be the same as operating income in a traditional income statement regardless of changes in inventory levels. All fixed costs, including fixed MOH, are expensed below the contribution margin line. The contribution margin is equal to sales revenue minus variable expenses.
Which of the following is true regarding the contribution margin ratio of a single product company? As fixed expenses decrease, the contribution margin ratio increases. The contribution margin ratio multiplied by the variable expense per unit equals the contribution margin per unit. The contribution margin ratio increases as the number of units sold increases. If sales increase, the dollar increase in net operating income can be computed by multiplying the contribution margin ratio by the dollar increase in sales.
Which one of the following is not an assumption of CVP analysis? The behavior of costs and revenues are linear within the relevant range. Sales mix remains constant. All units produced are sold. All costs are variable costs.
Which of the following is true of the contribution margin ratio? a.If the contribution margin ratio increases, the price must have decreased. b.If the contribution margin ratio increases, the variable cost ratio decreases. c.It is the proportion of each sales dollar available to cover variable costs. d.If the contribution margin ratio increases, more units must be sold to break even. e.It is complementary to the net profit ratio.