The break-even point in a given situation would be decreased by an increase in a. the CM ratio. b. total fixed costs. C. the mix of less profitable products sold. d. the ratio of the variable costs to sales. e. none of these.

The break-even point in a given situation would be decreased by an increase in a. the CM ratio. b. total fixed costs. C. the mix of less profitable products sold. d. the ratio of the variable costs to sales. e. none of these.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 11MC: When should a segment be dropped? A. only when the decrease in total contribution margin is less...

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16. The break-even point in a given situation would be decreased by an increase
in
a. the CM ratio.
b. total fixed costs.
c. the mix of less profitable products sold.
d. the ratio of the variable costs to sales.
t. none of these.

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If the sales mix in a multi-product environment shifts to a higher volume in low contribution margin products, the break-even point will ____________________________________ . A. remain unchanged because all products are included in the calculation of break-even B. increase because the low contribution margin products have little effect on break-even C. increase because the per composite unit contribution margin will decrease D. decrease because the per composite unit contribution margin will increase
When should a segment be dropped? A. only when the decrease in total contribution margin is less than the decrease in fixed cost B. only when the decrease in total contribution margin is equal to fixed cost C. only when the increase in total contribution margin is more than the decrease in fixed cost D. only when the decrease in total contribution margin is less than the decrease in variable cost
When sales price increases and all other variables are held constant, the break-even point will A. remain unchanged _________________________. B. increase C. decrease D. produce a lower contribution margin
When sales price decreases and all other variables are held constant, the break-even point will _______________________. A. remain unchanged B. increase C. decrease D. produce a higher contribution margin
When fixed costs decrease and all other variables remain unchanged, the break-even point will _______________. A. remain unchanged B. increase C. decrease D. produce a lower contribution margin
Discuss the two factors affecting both sales and variable costs to which a change in contribution margin can be attributed.
Which of the following would lead to the breakeven point of a product shifting to the left on a traditional breakeven chart? A An increase in the selling price per unit B An increase in the variable costs of each unit C An increase in the level of fixed costs D A decrease in the selling price per unit
Which of the following conditions would cause the break-even point to decrease? a. Increase in unit variable cost b. Decrease in unit selling price c. Decrease in unit variable cost d. Increase in total fixed costs
If both the fixed costs associated with a product and the variable costs (as apercentage of sales dollars) decrease, what will be the effect on the contribution margin ratio and the break-even point, respectively?a. Decrease, increase.b. Increase, decrease.c. Decrease, decrease.d. Increase, increase.
g) Briefly explain the impact of each of the following scenarios on the break-even point and the margin of Safety: (i) Increase in sales volume (ii) Increase in total fixed costs (iii) Increase in selling price per unit (iv) Decrease in variable costs per unit
1. If only the selling price per unit of a product increases (variable cost per unit and total fixed costs do not change), Using Break Even Analysis, provide a unique mathematical example to support the break even point decreasing
1. 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.