When the contribution margin is not sufficient to cover fixed expenses:Multiple Choicetotal profit equals total expenses.contribution margin is negative.a loss occurs.variable expenses equal contribution margin.

The contribution margin is calculated as difference between sales and variable costs. The excess of…

Answered: When the contribution margin is not…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 1MC: The amount of a units sales price that helps to cover fixed expenses is its ____________________. A....

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Similar questions

Which is not true? At break-even point, A. profit equals zeroB. gross profit equals operating expensesC. contribution margin equals fixed costsD. total revenue equals total costsE. none of the above.
When contribution is positive but equal to fixed cost: a. There is loss less than fixed cost b. There is loss equal to fixed cost c. There is loss more than fixed cost d. There will be neither profit nor loss
Which of the following statements about determining the breakeven point is FALSE? a) Breakeven revenues equal fixed costs divided by the variable cost per unit. b) Revenues equal fixed costs plus variable costs. c) Operating income is equal to zero. d) Contribution margin minus fixed costs is equal to zero.
A cost that cannot be changed because it arises from a past decision and is irrelevant to future decisions is a. An uncontrollable cost. d. An opportunity cost. b. An out-of-pocket cost. e. An incremental cost. c. A sunk cost.
Which of the following is not correct? At break-even A. Fixed costs equals contribution margin B. Profit equals zero C. Sales equal total costs D. Gross profit equals zero
Which of the following is a correct definition of the margin of safety? The excess of contribution margin over fixed costs The excess of gross margin over target income 0 The excess of sales revenue over the breakeven point The excess of ner income over all costs (both variable and fixed
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 the cost-volume-profit graph,a. the break-even point is found where the total revenue curve crosses the x-axis.b. the area of profit is to the left of the break-even point.c. the area of loss cannot be determined.d. both the total revenue curve and the total cost curve appear.e. neither the total revenue curve nor the total cost curve appear.
Which of the following does not represent a cost -volume -profit analysis equation a. Sales = totale expenses + profit b. Sales + fixed expenses profit = contribi argin + sales c. Profit = contrib contribution margin - fixed expenses d. Contribution margin- fixed expenses - profit 0 e. Sales - fixed expenses - variable expenses ses = 0
(Variable cost = Total cost - Fixed cost - Net profit) you have not consider the net profit in the calculation. I think it should be added right ?
What is the Breakeven formula when a profit is included: Group of answer choices c. Fixed Costs – Contribution Margin Variable Costs/ Profit Component None of the above Variable Costs + Profit Component/ Contribution Margin
In the cost-volume-profit analysis, income taxes a.increase the sales volume required to break even. b.are treated as a variable cost. c.are treated as a fixed cost. d.increase the sales volume required to earn a desired profit.

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When the contribution margin is not sufficient to cover fixed expenses: Multiple Choice total profit equals total expenses. contribution margin is negative. a loss occurs. variable expenses equal contribution margin.