Which of the following statements about CVP analysis is false? a. Operating income calculations in CVP analysis are based on contribution margin not gross margin. b. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. O c. Total revenues and total costs are linear in relation to output units. O d. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income e. All of the given answers are true.
Q: Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Sales…
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Q: Which one of the following is not considered an assumption of cost-volun O a. Fixed cost per unit is…
A: Option E is the correct answer i.e Cost can be Divided into variable and fixed components.
Q: Which one of the following is not considered an assumption of cost-volume-profit analysis? a.…
A:
Q: Listed below are nine technical accounting terms introduced in this chapter:Variable costs Relevant…
A:
Q: Which of the following is not an assumption underlying cost-volume-profit analysis? a. The sales mix…
A: Solution: Introduction: Cost Volume Profit (CVP) Analysis describes how changes in costs, expenses…
Q: The variable cost ratio is calculated as: а. The selling price per unit ratio / variable cost per…
A: Variable cost = Variable manufacturing cost + Variable selling and administrative cost
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…
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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: ?Which one of the following is not considered an assumption of cost-volume-profit analysis Costs can…
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A: Cost volume profit chart is the chart which shows total cost line, total revenue and profit for all…
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A: Cost volume profit analysis includes various techniques that help in the decision-making of the…
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A: It is given that :- Revenue function: R =890Q ‒5.5Q2 profit-maximizing price: P=494 OMR
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: Which of the following statements is true? a. Both variable and fixed cost change with the change in…
A: Variable cost- It is a cost which varies when the production level of the entity changes. There is a…
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A: If there is change in the ending inventory, net income will be different in both the methods.
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A: To find: which of the following statement is true
Q: Which of the following statements related to CVP chart is not true? O a. To calculate the total…
A: Cost-Volume-Profit (CVP) Analysis: It is a method followed to analyze the relationship between the…
Q: Which is the true statement? The CVP income statement shows contribution margin instead of gross…
A: The CVP Income Statement or the Cost- Volume- Profit Income Statement is almost similar to the…
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A: Break Even Analysis: It is the point where total cost is equal to revenue and It determine the…
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: 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: How do costs behave when there is a change in volume? a) ______ increases or decreases in total in…
A: Hi student SInce there are multiple questions, we will answer only first question. Since first…
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: Which of the following is a correct definition of the margin of safety? The excess of contribution…
A: Margin of safety: Margin of safety is the point at which company makes profit. In other words Margin…
Q: On a CVP graph for a profitable company, the total revenue (sales) line will be steeper than the…
A: The graphical representation of the cost-volume benefit analysis is a cost volume profit graph, also…
Q: 4. Which of the following statements is correct? a. Gross margin and contribution margin are the…
A: "Since you have asked multiple questions, we will solve first question for you. If you want any…
Q: Which of the following statements about CVP analysis is false? O a. The CVP analysis assumes that…
A: Cost Volume Profit (CVP) analysis is only accurate if costs are kept constant within a given…
Q: Which of the following statements about CVP analysis is false? O a. Unit selling price, unit…
A: CVP analysis appearance at the impact of sales volume variations on prices and operative profit. The…
Q: Which of the following is not a potential advantage of variable costing relative absorption costing?…
A: Cost volume profit analysis is calculated by dividing the fixed cost by the unit contribution…
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: TRUE OR FALSE Net income under variable costing is closely tied to changes in sales levels.
A: Fixed cost remains same under the variable costing. No matter how much units are produced, the total…
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A: The output levels achieve highest efficiency and peak profits when marginal revenue is on par or…
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A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…
Q: The variable cost ratio represents The proportion of variable costs in relation to net income The…
A: Solution : The variable cost ratio represents Correct answer is Option 3 . The proportion of…
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: ?Which of the following statements about CVP analysis is true .Operating income calculations in CVP…
A: Cost - Volume Profit Analysis ( CVP ) is used to identify how the changes in cost and volumes effect…
Q: Which of the following is not an assumption underlying cost-volume-profit analysis?
A: Cost Volume Profit analysis- This analysis helps in understanding the cost and profit based on the…
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.
Q: Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs…
A: Option b is correct.
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- How is the quantity factor for an increase or a decrease in the amount of sales computed in using contribution margin analysis?Understanding CVP relationships Calculate the missing amounts for each of thefollowing firms:Units Selling Variable Costs Contribution Fixed OperatingSold Price per Unit Margin Costs Income (Loss)Firm A 11,200 $24.00 ? $100,800 $41,300 ?Firm B 8,400 ? $18.20 ? 64,500 $32,940Firm C ? 7.30 4.20 10,850 ? (6,750)Firm D 4,720 ? 51.25 41,064 48,210 ?Answer the following: 1. The unit contribution margin is calculated as the difference between: a. selling price and fixed cost per unit. b. selling price and variable cost per unit. c. selling price and product cost per unit. d. fixed cost per unit and variable cost per unit. e. fixed cost per unit and product cost per unit 2. At the break-even point, the total contribution margin is: a. Zero b. Equal to total fixed costs c. Equal to total costs d. Equal to total variable costs 3. A company with a negative margin of safety also has a (an) a. Operating loss b. Operating profit c. Sales above its break-even point d. Sales equal to its break-even point 4. The break-even point is that level of activity where: a. total revenue equals total cost. b.variable cost equals fixed cost. c. total contribution margin equals the sum of variable cost plus fixed cost. d. sales revenue equals total variable cost.…
- 1. The difference between contribution margin and income from operations is ________. net income variable costs fixed costs None of these choices are correct. 2. The relationship between a company’s contribution margin and income from operations is measured by _____. contribution margin operating leverage margin of safety break-even point 3. The __________ is the relative distribution of sales among the products sold by a company. sales mix mixed cost product mix None of these choices are correct. 4. The unit selling price of the overall enterprise product equals the ________. average selling price of the products price of the highest-selling product in the mix sum of the unit selling prices of each product multiplied by its sales mix percentage price of the product having the lowest selling priceWhich of the following statements about CVP analysis is false ? a. Total revenues and total costs are linear in relation to output units . b. Managers use (CVP ) analysis to study the behavior of and relationship among the elements such as total revenues , total costs , and income c. All of the given answers are true . d. Unit selling price , unit variable costs , and total fixed costs are known and remain constant . e. Operating income calculations in CVP analysis are based on contribution margin not gross margin .Which of the following is true regarding the contribution margin ratio of a company that produces only a single product? Select one: a. The contribution margin ratio equals the selling price per unit less the variable expense ratio. b. The contribution margin per unit multiplied by the selling price per unit equals the contribution margin ratio. c. None of the given answer is correct. d. As fixed expenses decrease, the contribution margin ratio increases. e. The contribution margin ratio will decline as unit sales decline.
- 1. The slope of line B is equal to the: a. fixed cost per unit. b. selling price per unit. c. variable cost per unit. d. profit per unit. e. unit contribution margin. 2. Line A is the: a. total revenue line. b. Option 2 c. fixed cost line. d. variable cost line. e. total cost line. f. profit line.1. What type of cost includes product ingredients and materials? a. fixed c. total b. revenue d. variable 2. What type of cost includes the rental of space? a. fixed c. total b. revenue d. variable 3. What type of cost is the product of the price and the quantity sold? a. fixed c. total b. revenue d. variable 4. What concept is being described when the business will neither earn a profit nor suffer a loss? a. break-even c. profit b. loss d. summit 5. What type of analysis shows equal revenue and total cost? a. break-even c. profit-loss b. cost of variable d. volume of sales Read the selection for questions 6-10. Junedyl is planning to run a coffee shop where he plans to sell each cup of coffee at 50.00. The ₱ fixed cost that is amounting to 40,000.00 includes all his expenses for the rent, wages, basic needs and others. ₱ So even if Junedyl will not be able to sell, he is still obliged to pay this amount. If it costs Junedyl an average of 10.00 for every cup of coffee which is allotted…____ 36. In contrast to the total product and variable cost concepts used in setting seller's prices, the target cost approach assumes that: a. a markup is added to total cost b. selling price is set by the marketplace c. a markup is added to variable cost d. a markup is added to product cost ____ 37. The profit margin for Division E is 28% and the investment turnover is 2.8. What is the rate of return on investment for Division E? a. 20% b. 28% c. 14% d. 78.4% ____ 38. If variable costs per unit decreased because of a decrease in utility rates, the break-even point would: a. decrease b. increase c. remain the same d. increase or decrease, depending upon the percentage increase in utility rates ____ 39. Nevitt Corp.’s static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, utilities of $5,000, and supervisor salaries of…
- 1.What is a cost whose total amount changes in direct proportion to a change in volume? mixed cost fixed cost irrelevant cost variable cost 2. Which of the following costs is an example of a fixed cost? delivery costs salary of plant manager direct materials sales commissions 3. If production increases by 15%, how will total variable costs likely react? remain the same decrease by 15% increase by 7.5% increase by 15% 4. Which of the following statements is TRUE with respect to fixed costs per unit? They will increase as production decreases They will decrease as production decreases They will remain the same as production levels change They will increase as production increases 5. Canine Company produces and sells dog treats for discriminating pet owners. The unit selling price is $10, unit variable costs are $7, and total fixed costs are $3,300. What are breakeven sales? $11,000 $4,714 $3,300 $7,700 6. Fixed Company produces a single product selling for $30 per unit. Variable costs…1. Which of the following formulas is used to calculate break-even units? Fixed Costs ÷ Unit Contribution Margin Variable Costs ÷ Contribution Margin Percent Variable Costs ÷ Unit Contribution Margin Fixed Costs ÷ Contribution Margin Percent 2. What effect does the increase in fixed costs have on the break-even units? Decrease Increase No-effect None of these choices are correct. 3. If a company decides to increase the selling price of its product, what is its effect on break-even point? Decrease Increase No-effect None of these choices are correct.Required: 1. Prepare a contribution format income statement. 2. Prepare a traditional format income statement. 3. Calculate the selling price per unit. 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit. 6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in responses to changes in unit sales?