EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 14, Problem 5P
a.
Summary Introduction
To compute: Degree of operating leverage.
b.
Summary Introduction
To compute: Degree of financial leverage.
c.
Summary Introduction
To compute: Degree of combined leverage.
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Students have asked these similar questions
1. The formula used to calculate the number of units needed in order to earn a target income is
a. (Fixed costs + variable costs) / Sales
b. (Fixed costs + target income) / Sales
c. (Fixed costs + target income) / CM per unit
d. (Fixed costs + variable costs) / CM per unit
2. The indifference point is reached when *
a. The savings in variable cost is equal to the increase in fixed costs.
b. The savings in variable cost is less than the increase in fixed costs.
c. The savings in fixed cost is equal to the decrease in variable cost.
d. The savings in fixed cost is more than the increase in variable costs.'
3. Which of the following is not an assumption used to prepare a cost-volume-profit graph? *
a. Constant sales mix
b. Constant cost fluctuations
c. Units produced equal units sold
d. Liner costs within the relevant range
Answer the following:
1. The slope of line A is equal to the:
a. fixed cost per unit.
b. selling price per unit.
c. profit per unit.
d. semivariable cost per unit.
e. unit contribution margin.
2. Line C represents the level of:
a. fixed cost.
b. variable cost.
c. semivariable cost.
d. total cost.
e. mixed cost.
3. Line B represents the level of:
a. fixed cost.
b. variable cost.
c. semivariable cost.
d. total cost.
e. mixed cost.
4. 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.
5. 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. 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.
Chapter 14 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Ch. 14.A - Prob. 1QTDCh. 14.A - Prob. 2QTDCh. 14.A - Prob. 3QTDCh. 14.A - Prob. 2PCh. 14.A - Prob. 3PCh. 14.A - Prob. 4PCh. 14.A - Prob. 5PCh. 14.A - Prob. 6PCh. 14.A - Prob. 7PCh. 14.A - Prob. 8P
Ch. 14 - Prob. 1QTDCh. 14 - Prob. 2QTDCh. 14 - Prob. 3QTDCh. 14 - Prob. 4QTDCh. 14 - Prob. 5QTDCh. 14 - Prob. 6QTDCh. 14 - Prob. 7QTDCh. 14 - Prob. 8QTDCh. 14 - Prob. 9QTDCh. 14 - Prob. 10QTDCh. 14 - Prob. 11QTDCh. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3PCh. 14 - Prob. 4PCh. 14 - Prob. 5PCh. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - Prob. 8PCh. 14 - Prob. 9PCh. 14 - Prob. 10PCh. 14 - Prob. 11PCh. 14 - Prob. 12PCh. 14 - Prob. 13PCh. 14 - Prob. 14PCh. 14 - Prob. 15PCh. 14 - Prob. 16PCh. 14 - Prob. 17PCh. 14 - Prob. 18PCh. 14 - Prob. 19PCh. 14 - Prob. 20PCh. 14 - Prob. 21PCh. 14 - Prob. 22PCh. 14 - Prob. 23PCh. 14 - Prob. 24PCh. 14 - Prob. 25PCh. 14 - Prob. 26PCh. 14 - Prob. 27PCh. 14 - Prob. 28PCh. 14 - Prob. 29PCh. 14 - Prob. 30PCh. 14 - Prob. 31PCh. 14 - Prob. 32PCh. 14 - Prob. 33PCh. 14 - Prob. 34P
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Similar questions
- The contribution margin is the a. amount by which sales exceed total fixed cost. b. difference between sales and total cost. c. difference between sales and operating income. d. difference between sales and total variable cost. e. difference between variable cost and fixed cost.arrow_forwardWhich 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 .arrow_forwardSelect the correct statement concerning the cost-volume-profit graph at right: At point B, profits equal total costs. Line E is the total cost line. Line F is the variable cost line. The point identified by "B" is the break-even point.arrow_forward
- Which of the following is not an assumption underlying cost-volume-profit analysis?a. The sales mix is constant.b. The break-even point will be passed during the period.c. Total sales and total costs can be represented by straight lines.d. Costs can be accurately divided into fixed and variable components.arrow_forwardIf Q equals the level of output, P is the selling price per unit, V is the variable cost per unit, and F is the fixed cost, then the break-even point in units is: a Q ÷ (P − V). b F ÷ (P − V). c V ÷ (P − V). d F ÷ [Q(P − V)].arrow_forwardWhich one of the following is not an assumption of CVP analysis? The behavior of costs and revenues are linear within the relevant range. Sales mix remains constant. All units produced are sold. All costs are variable costs.arrow_forward
- Which of the following is not an assumption underlying cost-volume-profit analysis? a.The break-even point will be passed during the period. b.Total sales and total costs can be represented by straight lines. c.Costs can be accurately divided into fixed and variable components. d.The sales mix is constant.arrow_forwardWhich of the following best describes a variable cost? A cost that: a. Represents a fixed proportion of total costs b. Has a direct relationship with outputc. Is sometimes also known as an indirect cos d. Falls on average, as output increases.arrow_forwardThe break-even point in CVP analysis is defined as the point 1) where output units equal input units. 2) where total revenue equals fixed costs. 3) where revenues less variable costs equal operating income. 4) where the unit contribution margin equals the selling price less the unit variable cost. 5) where total revenue equals total costs.arrow_forward
- How do costs behave when there is a change in volume?a) ______ increases or decreases in total in direct proportion to increases or decreases in sales volume. b) ______ remains the same in total, regardless of change in sales. c) ______ have both a variable and fixed component. d) Answer the following regarding the high-low method:i) What is the formula for determining the variable costs when using the high low method:ii) Given the following information for the high and low levels, what is the variable cost per unit and the total fixed costs? iii) Based on the information in part ii), what is the relevant range?In MyAccountingLab, complete Try It! 21-1 and S21-1 through S21-3.LO2. What is contribution margin, and how is it used to compute operating income?a) What is the contribution margin if net sales revenue is $100,000 and variable costs are $40,000? b) Based on the information in part a), what is the contribution margin ratio?In MyAccountingLab, complete Try It! 21-2 and S21-4 and…arrow_forwardg) Briefly explain the impact of each of the following scenarios on the contribution margin per unit and thebreak-even point:(i) Sales volume increases(ii) Total fixed cost decreases(iii) Selling price per unit increases(iv) Variable cost per unit increasesarrow_forwardContribution margin is a.the same as sales revenue b.the excess of sales over variable costs c.another term for volume in the "cost-volume-profit" analysis d.profitarrow_forward
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