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

Q: When should a segment be dropped?     only when the decrease in total contribution margin is less…

A:

Q: The amount of revenue required to earn a target profit is equal to Total fixed cost divided by…

A: The break even sales are the sales where business earns no profit no loss.

Q: Contribution margin per unit is the amount by which a products unit selling price exceeds its…

A: Contribution margin:- Contribution margin Indicates how much money is left after variable costs are…

Q: Which of the following is correct? The break-even point occurs when: Select one: a. total variable…

A: Break even point is the point where the production level at which the production costs equal to the…

Q: Which of the following is called minimum point of production at which total cost is recovered:…

A: The margin of safety sales is calculated as difference between current sales and break even sales.

Q: Margin of safety is computed as Select one: O a. Contribution margin - Fixed costs O b. Breakeven…

A: Margin Of Safety is the difference between Break Even Sales and Actual Sales

Q: The margin of safety is equal to:

A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…

Q: CVP analysis is most important for the determination of [A] sales revenue necessary to equal fixed…

A: Cost: It refers to the economic value incurred by the company for producing a product or service.

Q: Which of the following statements is NOT true? A) Total variable costs change with volume B) Fixed…

A: Variable Cost change with level of activity Fixed Costs per unit changes when the level of activity…

Q: Which costs will change with a decrease in activity within the relevant range? Unit variable cost…

A: Cost can be classified into two categories i.e fixed cost and variable cost. The fixed cost remains…

Q: Which of the following is true about the changes in fixed cost? An increase in production will…

A: Fixed Cost: It is a cost which is constant in the short run, it is not related to any change in the…

Q: Which of the following statements is true about fixed and variable costs? * Both costs are constant…

A: Solution:- When sales units are increases or decreases the total sales also increase or decreases…

Q: In applying the high-low method of cost estimation to mixed costs, how is the total fixed cost…

A: Mixed cost also called the semi variable cost . Mixed cost contains both fixed and variable cost .…

Q: On a CVP graph, the intersection of the sales revenue line and the total cost line is known as the:…

A: The Break-even point indicates that total units are to be sold by the business entity to recover its…

Q: when total contribution margin equals total fixed cost this indicates operating income true false

A: First we understand contribution margin Contribution margin means Variable cost   deduct from Sales…

Q: Select the correct statement regarding fixed costs.  A) Because they do not change, fixed costs…

A: Fixed costs are the costs that remain constant irrespective of the volume of production.

Q: The amount of increase or decrease in cost that is expected from a particular course of action as…

A: Discretionary cost: A discretionary expense is a cost that a business or household can survive…

Q: The total contribution margin is equivalent to the combined net profit and fixed costs. It can be…

A: Solution: The total contribution margin is equivalent to the combined net profit and fixed costs =…

Q: Select the correct statement regarding fixed costs. They do not change, because fixed costs should…

A:

Q: Cost-Capacity calculation technique takes into account a constant exponent to relate different costs…

A: Sensitivity analysis is financial analysis that determine The potential percent gain or loss in…

Q: Which of the following statements about CVP analysis is true? O a. Unit selling price, unit variable…

A: Cost volume profit analysis is the methods to identify the impact on operating income due to the…

Q: The break-even point is that level of activity where a. total contribution margin equals the sum of…

A: At break-even point, there is no profit or no loss.

Q: Contribution margin is equal to [A] fixed cost - loss [B] profit + variable cost [C] sales - fixed…

A:

Q: On a CVP graph, the intersection of the sales revenue line and the total cost line is known as the:…

A: CVP stands for Cost-Volume-Profit analysis. It is helpful in determining the change in the total…

Q: A changes in direct proportion to changes in the cost-driver level * mixed costs O fixed costs O…

A: If the change in cost and change cost driver level is of direct proportion, it is not fixed cost or…

Q: The break-even point is that level of activity where: Select one: O a. profit equals to zero. O b.…

A: Break-Even Point: It is the point of sales at which entity neither earns a profit nor suffers a…

Q: Which of the following is not a step st driver rate by the volume of cost w to reduce the costs of…

A: Explanation: Activity based costing is a costing  technique where production is split into different…

Q: Which of the following statements about CVP analysis is true? O a. Operating income calculations in…

A: Selling price:  Selling price is a price set by the supplier at which he is ready to sell his…

Q: Contribution margin per unit is the amount by which a product's unit selling price exceeds its…

A: Selling price: Selling price is a price set by the supplier at which he is ready to sell his goods.…

Q: The term 'break even' point is defined as when: A. fixed costs equal total revenues B. variable…

A: The formula for calculating the break even point in units: Break Even Point (in Units)=Fixed…

Q: Margin of safety ratio is computed by dividing excess of actual or budgeted sales from break- even…

A: Margin of safety ratio = Profit ratio / Contribution margin ratio

Q: Cost-Volume-Profit graph contains an "Area of Loss" and an "Area of Profitability". Which of the…

A: Meaning of Cost Volume-profit graph Cost Volume profit graph is also shortly called as CVP graph. It…

Q: When using CVP Analysis, Net Profit (positive NI) would occur when Fixed Costs (FC) exceed total…

A: Net income as per CVP analysis -  sales - variable cost = contribution  contribution - fixed cost =…

Q: The “plus” in cost-plus pricing is often referred to as Markup.   Extra profit.   Gross profit.…

A: Cost plus pricing means when selling price is fixed as a addition of profit on the cost price. For…

Q: simple cost analysis method to identify fixed costs and variable costs in a linear cost function is…

A: High low method is method which separates the elements of fixed cost and variable cost from the…

Q: Which of the following statements about determining the breakeven point is FALSE?       a)…

A: The breakeven point is the level of production at which the costs of production equals the revenue…

Q: following Fixed costs, variable costs, sales, breakeven point value, safety threshold ratio

A: Given in the question: Sales 8500 Raw Materials 2350 Insurance 275 Loan…

Q: 1. The amount of increase or decrease in revenue that is expected from a particular course of action…

A: Differential costing is a technique where differential costs are considered relevant. Differential…

Q: In describing the cost formula equation Y = a + bX, which of the following statements is NOT…

A: Cost formula equation shows the combination or mixture of fixed costs and variable costs for…

Q: Fixed costs per unit . Can be estimated by the high-low method. O Remains the same when the level of…

A: The monetary value paid for the acquisition of something, or to run the operations of the…

Q: The formula for Contribution is Select one: a. Fixed cost + loss b. Sales - Variable cost c. Fixed…

A: Cost accounting system is a framework that guides the firm to calculate their cost and helps in…

Q: Which of the following do not increase or decrease when the volume of production changes? O a. Fixed…

A: Some cost do not get affected by the volume of production. It remains same at all the levels of…

Q: Write “True” if the statement is true and write “False” if the statement is false.   Fixed cost is…

A: The total cost of production includes the variable costs, fixed costs and mixed costs.

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.