The variable cost ratio represents The proportion of variable costs in relation to net income The proportion of variable costs in relation to contribution margin The proportion of variable costs in relation to sales The complementary proportion of fixed costs ratio in relation to sales Group of answer choices 1 2 3 4

The variable cost ratio represents The proportion of variable costs in relation to net income The proportion of variable costs in relation to contribution margin The proportion of variable costs in relation to sales The complementary proportion of fixed costs ratio in relation to sales Group of answer choices 1 2 3 4

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 5SEQ

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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.
Contribution margin ratio is the proportion of contribution in relation to the Net Income Variable costs Sales Fixed costs Group of answer choices 1 2 3 4
Which of the following statements is true when making decisions using cost-volume-profit (CVP) analysis? Select one: a. As long as the contribution margin is a positive number, net income will be positive b. As long as variable costs are more than fixed costs, net income will be negative c. As long as the contribution margin is greater than fixed costs, net income will be positive d. As long as the sales price per unit is greater than fixed costs per unit, net income will be positive
The contribution margin ratio can be calculated in all of the following ways except: a.1 − Variable cost ratio. b.Contribution margin per unit / Price. c.Total contribution margin / Total sales. d.Fixed costs / Contribution margin ratio. e.All of these choices are correct. Total contribution margin divided by total sales is the: a.contribution margin ratio. b.sales ratio. c.target income. d.margin of safety. e.indifference point.
What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit? A. Margin of safety ratioB. Contribution margin ratioC. Costs and expenses ratioD. Profit ratio
The three most common cost behavior classifications are a. variable costs, product costs, and sunk costs b. variable costs, period costs, and differential costs c. variable costs, sunk costs, and opportunity costs d. fixed costs, variable costs, and mixed costs The contribution margin ratio is a. the portion of equity contributed by the stockholders b. the same as profit c. the same as the profit-volume ratio d. the same as the variable cost ratio
The mathematical equation for computing required sales to obtain target net income is: Required Sales Revenue = a. Total Fixed Costs + Target Net income b. Total Variable Costs + Total Fixed Cost + Target Net Income c. Total Contribution – Total Fixed Costs d. Total Variable Costs + Target Net Income
The amount of revenue required to earn a target profit is equal to Total fixed cost divided by contribution margin Total fixed cost divided by the contribution margin ratio Targeted profit divided by the contribution margin ratio Total fixed cost- plus targeted profit divided by contribution margin ratio Targeted profit divided by the variable cost ratio
All of the following represents a cost-volume- profit relationship except: a. Total contribution margin + variable expenses = variable expenses + fixed expenses + profit b. Sales = totalexpenses + profit C. Sales - Variable expenses enses = fixedexpel expenses - profit d. Sales - variable expenses - profit = fixed expenses e Profit = totalcontril contribution margin - expenses
The variable cost ratio is calculated as? .a the selling price per unit/the selling price per) contribution margin ratio - (unit B. None of the given answers .c Selling price per unit - the variable cost per unit .d The selling price per unit / variable cost per unit .e The selling price per unit ratio / variable cost per unit ratio
Explain the difference between the economist Cost-Volume-Profit (CVP) analysis model and the accountant CVP analysis model.C. The Mathematical Equation Method and Contribution Margin Method is a method used to calculate Break-Even Point (BEP) for a single product. Is there any different in the calculated amount of BEP between the two (2) methods? Justify your answer.