Two companies have identical fixed expenses, unit variable expenses, and profits. Yet one company has set a much lower price for its product. Explain how this can happen.

Q: Company X has two products: Product A and product B. Product A has a higher selling price but a…

A: Solution Concept If a product line has high selling price but a lower contribution margin it implies…

Q: Which of the following is true if a company can accept a special order without affecting its regular…

A: The following is true if a company can accept a special order without affecting its regular sales…

Q: A company observed a decrease in the cost per unit. All other things being equal, which of the…

A: The production iincludes of variable and fixed costs.

Q: Give two examples in which the difference in the costs of two products or services is much smaller…

A: The difference in cost in providing railway travel to a tourist and to a business person is nil.The…

Q: Which of the following may form the basis for the price a company (working at full capacity) should…

A: Opportunity costs : The benefit foregone by the company by employing the resource in other…

Q: Which of the following is not correct? At break-even A. Fixed costs equals contribution margin B.…

A: Break even point means where there is no profit no loss. Variable cost means the cost which vary…

Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…

A: Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the…

Q: Under variable costing, how is it possible to increase net operating income without increasing sales

A: Introduction:- Under the Variable costing includes only variable manufacturing costs such as  direct…

Q: Which of the following is true of a company that uses absorption costing? Multiple Choice   Net…

A: Absorption costing: Under the absorption costing method, manufacturing costs such as direct material…

Q: If a company had a pure fixed cost structure, every dollar of revenue after covering the fixed costs…

A: Step 1 In the pure fixed cost structure, the variable cost does not exist; only fixed cost hit the…

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: Would an increase in variable costs per unit cause a company’s break-even point to increase or…

A: Variable cost is an amount that changes in total in proportion to the volume produced and sold…

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: Which of the following formulas is used to calculate break-even units? Fixed Costs ÷ Unit…

A: "Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: If a company is a multiproduct firm. a. can only utilize CVP analysis if the contribution margin…

A: c)  a multiproduct firm can earn a lower than expected profit though the total number of units sold…

Q: If the company produces no output, it must pay No cost (A A small amount of variable cost Its fixed…

A: Fixed costs is the cost incurred by the business which is to be paid irrespective of the number of…

Q: If the units produced exceed unit sales, which method would you expect to show the higher…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

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: A company observed a decrease in the cost per unit. All other things being equal, which of the…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Two companies have identical fixed expenses, unit variable expenses, and profits. Yet one company…

A: Contribution margin income statement is an income statement in which all the variable expenses are…

Q: statement below. The point where total sales revenue equals total cost Drag answer here Fixed…

A: The contribution margin is computed as excess of sales revenue over variable expenses. The break…

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: 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: Which of the following may form the basis for the price a company (working at full capacity) should…

A: There are several type of costs that are being incurred in business. These are fixed costs, variable…

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: Which of the following is true regarding the contribution margin ratio of a company that produces…

A: Contribution margin ratio =Contribution per unitSales price per unit Contribution per unit = Sales…

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: Give an example of how, under absorption costing, operating income could fall even though the unit…

A: Definition:   Absorption Costing: The absorption costing is a method used to allocate the fixed…

Q: Which one of the following is not an assumption of CVP analysis?   The behavior of costs and…

A: Cost Volume profit analysis is one of the means to find out how fixed costs and variable costs…

Q: Based on the image below for a manufacturing company, the correct statement is A. line b graphs…

A:

Q: Which of the following statements is true for a company that uses variable costing?  Profit…

A: Profit fluctuates with sales  Profit increases with increases in sales and vice versa.  Product…

Q: Companies should always make and sell all products whose selling prices exceed variable costs.”…

A: Contribution margin: Contribution margin is computed by deducting variable expense from revenues. It…

Q: Frisco Corporation is analyzing its fixed and variable costs within its current relevant range. As…

A:

Q: True or False 1. If a company has mixed expenses, the fixed component can be combined with the…

A:

Q: NUBD Co. manufactures and sells a single product. If the selling price and variable costs both…

A: we know that, Fixed cost in total will remain the same and fixed cost per unit will change as per…

Q: Often the most direct route to a business decision is an incremental analysis. What is meant by an…

A: “Hey, since there are multiple questions posted, we will answer first two questions for you. If you…

Q: The main trouble with variable costing is that it ignores the increasing importance of fixed costs…

A: Variable costing is a concept used in costing to ascertain the relation between sales, costs and…

Q: Which of the following is not a feature of full cost plus sales pricing related to a range of a…

A: Following is the answer to the given question

Q: If the percentage change in operating income resulting from a given percentagechange in sales is…

A: Operating Leverage is the % change in EBIT to the % change in sales. It shows how much the EBIT…

Q: 1.  The difference between contribution margin and income from operations is ________. net income…

A: Fixed costs = Contribution margin - Income from operations Operating leverage = Contribution margin…

Q: NUBD Co. manufactures and sells a single product. If the selling price and variable costs both…

A: Contribution margin per unit = Selling price per unit - Variable cost per unit Contribution margin…

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: a. What amount of joint product cost would be allocate to each product? b. What is financial…

A: Lets understand the basics. For allocating joint process cost, there are various methods are…

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