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

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

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Description: 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

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 14MC: Which of the following statements is true regarding average fixed costs? A. Average fixed costs per...

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Which of the following statements is true regarding average fixed costs? A. Average fixed costs per unit remain fixed regardless of level of activity. B. Average fixed costs per unit rise as the level of activity rises. C. Average fixed costs per unit fall as the level of activity rises. D. Average fixed costs per unit cannot be determined.
When should a segment be dropped? A. only when the decrease in total contribution margin is less than the decrease in fixed cost B. only when the decrease in total contribution margin is equal to fixed cost C. only when the increase in total contribution margin is more than the decrease in fixed cost D. only when the decrease in total contribution margin is less than the decrease in variable cost
The amount of a units sales price that helps to cover fixed expenses is its ____________________. A. contribution margin B. profit C. variable cost D. stepped cost
When fixed costs increase and all other variables remain unchanged, the contribution margin will A. remain unchanged _____________________. B. increase C. decrease D. increase variable costs per unit
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
The total contribution margin is equivalent to the combined net profit and fixed costs. It can be computed also by adding sales and variable costs. a. Both statements are correct.b. Both statements are false.c. Only the first statement is correct.d. Only the second statement is correct.
Which of the following statements about CVP analysis is true? O a. Unit selling price, unit variable costs, and total fixed costs are known and remain constant . b. All of the given answers are false. O . Operating income calculations in CVP analysis are based on gross margin. O d The CVP analysis assumes that total variable costs remain the same over a relevant range .
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.
Which 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 .
When Total Contribution magrin equals total fixed costs, this indicates operating income True False
Which of the following statements is CORRECT with respect to fixed costs per unit? Select one: A.They will decrease as production decreases. B.They will increase as production increases. C.They will increase as production decreases. D.They will remain the same as production levels change.