Answered: The break-even point is that level of…

The break-even point is that level of activity where: Multiple Choice contribution margin equals fixed cost. total contribution margin equals the sum of variable cost plus fixed cost.

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...

See similar textbooks

Related questions

Q: 1. A credit card account had a $729 balance on March 5. A purchase of $152 was made on March 10,…

A: Average daily balance is the balance at which the finance charge is computed on a credit card. It is…

Q: What will Chrissie claim at Item 21F of the tax returm (capital works deduction)?

A: As per Division 43 of Income Tax Assessment Act 1997 (Australian Tax Law), capital works which are…

Q: Vilco Inc. Sales Revenue Variable Manufacturing Cost per Unit Total Fixed Manufacturing Cost…

A: Units Produced = 4,000 Units sold = 2,000 Fixed manufacturing cost = $16,000

Q: NM Company deals with exotic fruits and vegetables. The average receivable was $9,300 in 2021. The…

A: Accounts receivable (A/R) are the portion of current assets of the entity's financial statements…

Q: Oriole Company purchased a new van for floral deliveries on January 1, 2022. The van cost $60000…

A: The double declining balance method is a commonly used depreciation method in accounting. It is an…

Q: Scotland Corporation had net income for 2024 of $78,000. Scotland had 11,000 shares of common stock…

A: The earnings per share is calculated as net income available to common shareholders divided by…

Q: Calculate each of the following amounts as of both December 31, 2021, and December 31, 2022 (Enter…

A: Project Benefit Obligation : Project Benefit Obligation (PBO) is a financial term that refers to the…

Q: Required information [The following information applies to the questions displayed below] On January…

A: The lump sum paid to acquire different assets is allocated to different assets on the basis of fair…

Q: In the cost production why is there a values for the labor cost when it is supposed to. be…

A: Given in the question: Price per Liter = 10,000 Materials cost per liter = 40% of Price Labor cost…

Q: On November 1, 2021, Aviation Training Corp. borrows $52,000 cash from Community Savings and Loan.…

A: Notes payable refers to a liability that represents a written promise to pay a specific sum of money…

Q: Calculate Anaheim Corporation's excess net passive income tax in each of the following alternative…

A: Passive income is income generated from someone other than an employer. which can be derived from…

Q: Pittsfield Sound Center pays $290,000 for a group purchase of land, building, and equipment. At the…

A: Commercial organizations used journal entries to record their financial transactions in their…

Q: Inventory Using FIFO Beginning inventory, purchases, and sales for Item 8901 are as follows: 54…

A: Cost of merchandise sold is calculated by multiplying the number of goods sold with the purchase…

Q: Total budgeted fixed overhead cost for the Actual fixed overhead cost for the year Budgeted standard…

A: In accounting and finance, variance refers to the difference between an actual result and a planned…

Q: ng information applies to the questions displayed below] Alquist Company uses the retail method to…

A: Cost accounting refers to the method used to record the cost related to each product for…

Q: irchwood Manufacturing bought three used machines in a $167.000 lump-sum purchase. An independent…

A: To determine the cost of each machine, we need to find the proportion of the total appraised value…

Q: S -11/2 --11/11 Payment Purchase $65.00 End of Day Balance $145.00 $210.00 $210.00

A: Date Payment Purchase End of day balance X Number of Days Sum of balance 11/1-11/2 $145 X 2…

Q: 2) Prepare the Cost of Goods Manufactured and Cost of Goods Sold Statements based on the following…

A: The cost of goods manufactured is the amount incurred while producing the units. The cost of Goods…

Q: Is it better to save $100 every month or $1,200 every year if you can eam 6% interest every year for…

A: Time value of money is a financial concept which is used to calculate the value of money in present…

Q: Delta Automotive Corporation has the following assets listed in its 12/31/2024 trial balance: Cash…

A: Cash and cash equivalents refer to assets that are readily convertible into cash and have a low risk…

Q: In year 0 lavens Incorporated sold machinery with a

A: Step 1: Compute the realized gain/ (loss) as follows: Realised gain= Amount realised [FMV]-…

Q: Please explain proper steps by Step and Do Not Give Solution In Image Format ? And Fast Answering…

A: With the aid of a cash budget, companies and people can forecast their cash inflows and expenditures…

Q: Consider a decentralized company that has 2 divisions: Gold and Silver. The information for Gold is…

A: There are many methods of pricing some are cost based and some based on the market price and some of…

Q: ABC Limited has an asset with a carrying value of $50 000. The tax base of this asset is $40 000.…

A: Deferred Tax Asset (DTA) represents the future tax benefits that a company will receive because of…

Q: Jacob Long, the controller of Arvada Corporation, is trying to prepare a sales budget for the coming…

A: Net Income represents the amount of money a company has earned after deducting all its expenses,…

Q: Support department cost allocation—reciprocal services method Davis Snowflake & Co. produces…

A: Lets understand the basics. There are different methods through which cost of service department is…

Q: Alexandria Aluminum Company, a manufacturer of recyclable soda cans, had the following inventory…

A: Income statement is the financial statement which is prepared by the entity for the purpose of…

Q: Birchwood Manufacturing bought three used machines in a $167,000 lump-sum purchase. An independent…

A: Asset is valued at acquisition cost. In case of lump sump purchase where two or more assets…

Q: Why is cash generated from operations usually larger than net profit? A business commentator made…

A: Cash flow from operations (CFO) is a measure of the amount of cash generated or used by a company's…

Q: The following information relates to the inventory of Gadgets Ltd during May. 1 st May Beginning…

A: A perpetual inventory system is a method of tracking inventory levels on an ongoing basis, in…

Q: The XR Company's Financial Year Ended on December 31, 2021. However, before the completion of the…

A: In accounting, a subsequent event is an event or transaction that occurs after the balance sheet…

Q: iehen Corporation uses a job-order costing system to assign manufacturing costs to jobs. At the end…

A: The direct cost incurred by a business in the manufacturing or acquisition of items delivered to…

Q: Use these factors to answer questions (ROUND ANSWERS TO NEAREST DOLLAR) n PV$1 0.73503 1 FV$1 PVA…

A: Loans are paid by equal fixed monthly payments and these carry the payment for loan and payment for…

Q: Cheyenne's Medical operates three support departments and two operating units, Surgery and ER. The…

A: First we will allocate total costs amongst various departments

Q: Regarding CFA Standard 1 (B), if all relevant parties are notified in writing of the gift or benefit…

A: CFA Standard 1(B) states that participants and applicants are forbidden to accept any incentive,…

Q: dent Designs requires three units of part A for every unit of A1 that it produces. Currently, part A…

A: Solution: a. Differential cost : Cost to buy = $ 6200 * 6.90 = $ 42,780 Cost to make : Total units =…

Q: At a volume of 20,000 units, Almount Industries reported sales revenues of $1,180,000, variable…

A: CVP analysis is used to identify the changes in costs and volume affect a company's…

Q: Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.5% x…

A: INTRODUCTION:- This question involves calculations related to pension accounting and specifically…

Q: Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely…

A: Net present value is capital budgeting concept it is calculated by using present value of cash…

Q: Dont uplode image in answer Al-Ittihad Company bought bonds issued by Jeddah Company on 06/01/2023,…

A: Bonds are corporate debt units issued by firms and securitized as tradeable assets. They are…

Q: Daniel Corporation had net income for 2024 of $73,000. Daniel had 15,000 shares of common stock…

A: The earning per share indicates the earning attributable to one unit of common shares. The EPS is…

Q: Baird Company, which sells electric razors, had $330,000 of cost of goods sold during the month of…

A: Budgeted cash disbursement :— This budget is prepared to estimate the cash payment for expenses…

Q: During Heaton Company's first two years of operations, it reported absorption costing net operating…

A: Variable costing is the method that computed the operating income by considering the variable cost…

Q: On December 31, 2023, Berclair Incorporated had 560 million shares of common stock and 3 million…

A: The financial ratio known as earnings per share (EPS) calculates a company's total profit per…

Q: 1. Prepare a General Journal entry to record the employer's payroll costs resulting from the…

A: The payroll register includes gross salary payable to all employees and statutory deductions on…

Q: Sales Cost of goods sold Gross profit Operating expenses salaries expense Depreciation expense Rent…

A: Cash flow from operating activities is a financial metric that represents the amount of cash…

Q: a. McKenzie's § 179 expense deduction is $ for 2022. His § 179 carryover to 2023 is $ b. How would…

A: A deduction is an outflow that can be deducted from a taxpayer's gross income in order to decrease…

Q: Your grandmother just gave you a building and land that you will use in your business. She paid…

A: (Note: “Since you have posted multiple questions, we will provide the solution only to the first…

Q: Part D Ken has created a budget, but he wonders if the budget fits his needs. Why would it be useful…

A: A budget is a financial plan that outlines an individual's or organization's expected income and…

Q: Smith-Kline Company maintains inventory records at selling prices as well as at cost. For 2024, the…

A: Under dollar value LIFO method, inventory is adjusted with the increase or decrease in the price…

Question

#50

The break-even point is that level of activity where:
Multiple Choice
O
O
O
contribution margin equals fixed cost.
total contribution margin equals the sum of variable cost plus fixed cost.
variable cost equals fixed cost.
sales revenue equals total variable cost.
sales revenue equals fixed cost.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction:-

VIEW

Step 2: Explanations:-

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The contribution margin is the a. amount by which sales exceed total fixed cost. b. difference between sales and total cost. c. difference between sales and operating income. d. difference between sales and total variable cost. e. difference between variable cost and fixed cost.
When variable costs increase and all other variables remain unchanged, the break-even point will ____________________. A. remain unchanged B. increase C. decrease D. produce a lower contribution margin
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.
When fixed costs increase and all other variables remain unchanged, the contribution margin will A. remain unchanged _____________________. B. increase C. decrease D. increase variable costs per unit
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
Describe how the scattergraph method breaks out the fixed and variable costs from a mixed cost. Now describe how the high-low method works. How do the two methods differ?
Which of the following statements is true regarding average fixed costs? A. Average fixed costs per unit remain fixed regardless of level of activity. B. Average fixed costs per unit rise as the level of activity rises. C. Average fixed costs per unit fall as the level of activity rises. D. Average fixed costs per unit cannot be determined.
Break-even for a multiple product firm. can be calculated by dividing total fixed costs by the contribution margin of a composite unit can be calculated by multiplying fixed costs by the contribution margin ratio of a composite unit can only be calculated when the proportion of products sold is the same for all products can be calculated by multiplying fixed costs by the contribution margin ratio of the most common product in the sales mix
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
The amount of a units sales price that helps to cover fixed expenses is its ____________________. A. contribution margin B. profit C. variable cost D. stepped cost
The break-even point in CVP analysis is defined as the point 1) where output units equal input units. 2) where total revenue equals fixed costs. 3) where revenues less variable costs equal operating income. 4) where the unit contribution margin equals the selling price less the unit variable cost. 5) where total revenue equals total costs.
Describe how total variable costs and unit variable costs behave with changes in the level of activity. Describe how total fixed costs and unit fixed costs behave with changes in the level of activity. In applying the high-low method of cost estimation to mixed costs, how is the total fixed cost estimated? How does the sales mix affect the calculation of the break-even point? Cite and give credit to the author that you are citing.