On a CVP graph for a profitable company, the total revenue (sales) line will be steeper than the line representing total costs (variable costs and fixed costs). False True
Q: On a CVP graph, the intersection of the sales revenue line and the total cost line is known as the:…
A: The Break-even point indicates that total units are to be sold by the business entity to recover its…
Q: In the CVP analysis, at the point of breakeven O a. total contribution margin minus total fixed…
A: The break even sales units are the sales where business earns no profit no loss.
Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…
A: The contribution margin decides which product gives more profits to the company. The contribution is…
Q: CVP analysis
A: Option "b" is wrong because the statement is true. The purpose of CVP analysis is to study the…
Q: Once a company exceeds its breakeven level, operating income can be calculated by multiplying: The…
A: Break-even point:
Q: The firm with the largest ratio of fixed costs to total costs automatically gets the greatest…
A: Lets understand the basics. Fixed cost is a cost which is fixed over a period of time. It includes…
Q: In determining cost behavior in business, the cost function is often expressed as Y=a+bX. Which one…
A: There are two types of costs in the business, one is fixed costs and other is variable costs. Fixed…
Q: In a manufacturing setting, "the best short-term profit maximization approach is to maximize…
A: In the short run, fixed costs are constant. Therefore, to maximize the profit, the contribution per…
Q: The degree of operating leverage Select one: O a. can be computed by dividing total contribution…
A: Leverage is the risk that a company bears.
Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…
A: The costs when are covered with certain amount of revenue earned, such amount is treated as break…
Q: The total contribution margin is equivalent to the combined net profit and fixed costs. It can be…
A: Solution: The total contribution margin is equivalent to the combined net profit and fixed costs =…
Q: profit graph which of the following is not true? A.Total revenue will always be $0 at zero sales…
A: Profit graph is a graph shows the profit and different level of sales in comparison to the cost…
Q: All other things the same, which of the following would be true of the contribution margin and…
A: The contribution margin is the part of sales revenue that remained after deducting the variable cost…
Q: In response to a request from your immediate supervisor, you have prepared a CVP graphportraying the…
A: Cost-volume profit graph: Cost-volume profit graph is a graphical representation of sales, cost and…
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: Under the contribution income statement, a company's contribution margin will be higher if? A…
A: Contribution is the excess of the sales revenue generated during the year over the variable cost…
Q: Which of the following statements about CVP analysis is true? O a. Unit selling price, unit variable…
A: Cost volume profit analysis is the methods to identify the impact on operating income due to the…
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: 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: Under the contribution income statement, a company's contribution margin will be lower if? Fixed…
A: A break-even point is a point where the company incurs no loss and no profit. The contribution…
Q: If a company increases its fixed costs for Product B, then the contribution margin per unit will…
A:
Q: What is the high-low method used to estimate? a. variable costs and production capacity b. total…
A: The high-low method is a method using which the variable cost per unit and total fixed cost is…
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: If a company increases its fixed cost for product B, then the contribution margin per unit will…
A: Fixed cost is that cost which remains constant at particular level of…
Q: Which of the following statements about CVP analysis is true? O a. Operating income calculations in…
A: Selling price: Selling price is a price set by the supplier at which he is ready to sell his…
Q: On the cost-volume-profit graph, the area between the total cost line and the sales line before the…
A: This is part of break-even analysis.
Q: Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs…
A: Cost - volume - profit analysis It is used to determine the changes in cost and volume of sales…
Q: In the CVP analysis, Which of the following statements about the breakeven point is true? a.…
A: Cost volume profit analysis is useful to find out the different sales volume on the basis of…
Q: Which of the following is true regarding the contribution margin ratio of a company that produces…
A: Contribution margin is one of the important terms under the Cost Volume Profit analysis.Contribution…
Q: On a CVP graph for a profitable company, the total revenue (sales) line will be steeper than the…
A: The graphical representation of the cost-volume benefit analysis is a cost volume profit graph, also…
Q: The use of fixed costs to extract higher percentage changes in profits as sales activity changes…
A: SOLUTION- DEGREE OF OPERATING LEVERAGE CALCULATES THE PROPORTIONAL CHANGE IN OPERATING INCOME THAT…
Q: Holding other factors constant, a company's contribution margin per unit will increase with: a. All…
A: Contribution margin per unit is the amount remaining with the entity on selling each unit of product…
Q: Compared to companies that have a cost structure that is mainly comprised of fixed costs, companies…
A: Operating income shows that how revenue leads to growth in operating income. It is a tool to measure…
Q: Which of the following statements about CVP analysis is false? O a. The CVP analysis assumes that…
A: Cost Volume Profit (CVP) analysis is only accurate if costs are kept constant within a given…
Q: When using CVP Analysis, Net Profit (positive NI) would occur when Fixed Costs (FC) exceed total…
A: Net income as per CVP analysis - sales - variable cost = contribution contribution - fixed cost =…
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: If a company increases its fixed costs for Product B, then the contribution margin per unit will a.…
A: Option c is the answer.
Q: To maximize profits, firms produce the level of output that: O a. equates total revenue and total…
A: The output levels achieve highest efficiency and peak profits when marginal revenue is on par or…
Q: Which of the following occurs if a company experiences a decrease in its fixed costs? Select one: a.…
A: Break-even point: In the accounting term break-even point is a condition where the income or profit…
Q: ?Which of the following statements about CVP analysis is true .Operating income calculations in CVP…
A: Cost - Volume Profit Analysis ( CVP ) is used to identify how the changes in cost and volumes effect…
Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…
A: "Since you have asked multiple question we will solve the first question for you. If you want any…
Q: The measure that reflects an organization's variable and fixed cost relationship and indicates how a…
A: Break even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at…
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: Describe the differences in behavior of fixed costs, variable costs, semi-variable costs and step…
A: Fixed costs are fixed in nature, it doesn't vary with the change in units. The total fixed cost will…
Q: Which of the following statements about CVP analysis is false? O a. Operating income calculations in…
A: Cost-Volume-Profit (CVP) Analysis: It is a method followed to analyze the relationship between the…
Q: Holding other factors constant, a company's contribution margin per unit will increase with: a. All…
A: Contribution margin per unit is the value that can be determined by reducing the variable costs from…
Q: Which of the following expressions can be used to calculate brcak-even sales revenue with the…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: the product with the higher contribution ratio , which of the following is true ? O a Fixed cost…
A: Below option is true:- d. the average contribution margin ratio will increase
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- The use of fixed costs to extract higher percentage changes in profits as sales activity changes involves a. margin of safety. b. unit contribution margin. c. degree of operating leverage. d. sensitivity analysis. e. variable cost reduction.The high-low method and least-squares regression are used by managers to _____________________. A. decide whether to make or buy a component part B. minimize corporate tax liability C. maximize output D. estimate costsWhat is meant by a products contribution margin ratio and how is this ratio useful in planning business operations?
- Continuous improvement is the governing principle of a lean accounting system. Following are several performance measures. Some of these measures would be associated with a traditional standard-costing accounting system, and some would be associated with a lean accounting system. a. Materials price variances b. Cycle time c. Comparison of actual product costs with target costs d. Materials quantity or efficiency variances e. Comparison of actual product costs over time (trend reports) f. Comparison of actual overhead costs, item by item, with the corresponding budgeted costs g. Comparison of product costs with competitors product costs h. Percentage of on-time deliveries i. First-time through j. Reports of value- and non-value-added costs k. Labor efficiency variances l. Days of inventory m. Downtime n. Manufacturing cycle efficiency (MCE) o. Unused (available) capacity variance p. Labor rate variance q. Using a sister plants best practices as a performance standard Required: 1. Classify each measure as lean or traditional (standard costing). If traditional, discuss the measures limitations for a lean environment. If it is a lean measure, describe how the measure supports the objectives of lean manufacturing. 2. Classify the measures into operational (nonfinancial) and financial categories. Explain why operational measures are better for control at the shop level (production floor) than financial measures. Should any financial measures be used at the operational level? 3. Suggest some additional measures that you would like to see added to the list that would be supportive of lean objectives.Which of the following statements about CVP analysis is false ? a. Total revenues and total costs are linear in relation to output units . b. Managers use (CVP ) analysis to study the behavior of and relationship among the elements such as total revenues , total costs , and income c. All of the given answers are true . d. Unit selling price , unit variable costs , and total fixed costs are known and remain constant . e. Operating income calculations in CVP analysis are based on contribution margin not gross margin .Cost-volume-profit analysis is used to make many decisions, including product pricing and controlling costs. How does good operating leverage magnify earnings results with modest revenue increase?
- What can the weighted average contribution margin ratio be used for? To solve for a measure, at any level of sales volume, of the sensitivity of operating profit to changes in volume. Breakeven and profit planning for sales volume expressed in dollars (Y) rather than units (Q). To calculate an average per-unit contribution margin based on an assumed sales mix. To figure out the relative proportion in which a company’s products (or services) are sold. To determine the extent of fixed costs in an organization’s cost structure.A Cost-Volume-Profit graph contains an "Area of Loss" and an "Area ofProfitability". Which of the following best explains the difference between thetwo points on the graph? A. The area of loss represents the difference between Sales and Variable Cost.B. The area of loss begins with the concept that fixed costs have to be recovered priorto sales contributing to profit.C. The area of profit represents the difference between Sales and Variable Cost.D. The area of profit begins with the concept that no company would have any level ofsales below the break-even point.In response to a request from your immediate supervisor, you have prepared a CVP graphportraying the cost and revenue characteristics of your company’s product and operations.Explain how the lines on the graph and the break-even point would change if ( a ) the selling priceper unit decreased, ( b ) fixed cost increased throughout the entire range of activity portrayed onthe graph, and ( c ) variable cost per unit increased.
- Which of the following is the indicator of the rate at which company is earning profit? Select one: a. Margin of safety b. All options are correct c. Contribution margin d. Profit volume ratioWhat can the weighted average contribution margin ratio be used for? Multiple Choice To solve for a measure, at any level of sales volume, of the sensitivity of operating profit to changes in volume. Breakeven and profit planning for sales volume expressed in dollars (Y) rather than units (Q). To calculate an average per-unit contribution margin based on an assumed sales mix. To figure out the relative proportion in which a company’s products (or services) are sold. To determine the extent of fixed costs in an organization’s cost structure.Which of the following is not an assumption underlying cost-volume-profit analysis?a. The sales mix is constant.b. The break-even point will be passed during the period.c. Total sales and total costs can be represented by straight lines.d. Costs can be accurately divided into fixed and variable components.
