Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 3, Problem 16MC
Break-even for a multiple product firm.
- can be calculated by dividing total fixed costs by the contribution margin of a composite unit
- can be calculated by multiplying fixed costs by the contribution margin ratio of a composite unit
- can only be calculated when the proportion of products sold is the same for all products
- can be calculated by multiplying fixed costs by the contribution margin ratio of the most common product in the sales mix
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Break-even for a multiple product firm ________.
Select one:
a.
can be calculated by multiplying fixed costs by the contribution margin ratio of a composite unit
b.
can be calculated by multiplying fixed costs by the contribution margin ratio of the most common product in the sales mix
c.
can only be calculated when the proportion of products sold is the same for all products
d.
can be calculated by dividing total fixed costs by the contribution margin of a composite unit
What can the weighted average contribution margin ratio be used for?
Multiple Choice
To solve for a measure, at any level of sales volume, of the sensitivity of operating profit to changes in volume.
Breakeven and profit planning for sales volume expressed in dollars (Y) rather than units (Q).
To calculate an average per-unit contribution margin based on an assumed sales mix.
To figure out the relative proportion in which a company’s products (or services) are sold.
To determine the extent of fixed costs in an organization’s cost structure.
Which of the following is true of a company that uses absorption costing?
Net operating income fluctuates directly with changes in sales volume.
Fixed production and fixed selling costs are considered to be product costs.
Unit product costs can change as a result of changes in the number of units manufactured.
Variable selling expenses are included in product costs.
Chapter 3 Solutions
Principles of Accounting Volume 2
Ch. 3 - The amount of a units sales price that helps to...Ch. 3 - A companys product sells for $150 and has variable...Ch. 3 - A companys product sells for $150 and has variable...Ch. 3 - A companys contribution margin per unit is $25. It...Ch. 3 - A company sells its products for $80 per unit and...Ch. 3 - If a company has fixed costs of $6.000 per month...Ch. 3 - Company A wants to earn $5,000 profit in the month...Ch. 3 - A company has wants to earn an income of $60,000...Ch. 3 - A company has pre-tax or operating income of...Ch. 3 - When sales price increases and all other variables...
Ch. 3 - When sales price decreases and all other variables...Ch. 3 - When variable costs increase and all other...Ch. 3 - When fixed costs decrease and all other variables...Ch. 3 - When fixed costs increase and all other variables...Ch. 3 - If the sales mix in a multi-product environment...Ch. 3 - Break-even for a multiple product firm. can be...Ch. 3 - Waskowski Company sells three products (A. B. and...Ch. 3 - Beaucheau Farms sells three products (E, F, and G)...Ch. 3 - A company sells two products, Model 101 and Model...Ch. 3 - Wallace Industries has total contribution margin...Ch. 3 - Macom Manufacturing has total contribution margin...Ch. 3 - If a firm has a contribution margin of $59,690 and...Ch. 3 - If a firm has a contribution margin of $78M90 and...Ch. 3 - Define and explain contribution margin on a per...Ch. 3 - Define and explain contribution margin ratio.Ch. 3 - Explain how a contribution margin income statement...Ch. 3 - In a cost-volume-profit analysis, explain what...Ch. 3 - What is meant by a products contribution margin...Ch. 3 - Explain how a manager can use CVP analysis to make...Ch. 3 - After conducting a CVP analysis, most businesses...Ch. 3 - Explain how for is possible for costs to change...Ch. 3 - Explain what a sales mix is and how changes in the...Ch. 3 - Explain how break-even analysis for a...Ch. 3 - Explain margin of safety and why it is an...Ch. 3 - Define operating leverage and explain its...Ch. 3 - Calculate the per-unit contribution margin of a...Ch. 3 - Calculate the per-unit contribution margin of a...Ch. 3 - A product has a sales price of $150 and a per-unit...Ch. 3 - A product has a sales price of $250 and a per-unit...Ch. 3 - Maple Enterprises sells a single product with a...Ch. 3 - Marlin Motors sells a single product with a...Ch. 3 - Flanders Manufacturing is considering purchasing a...Ch. 3 - Marchete Company produces a single product. They...Ch. 3 - Brahma Industries sells vinyl replacement windows...Ch. 3 - Salvador Manufacturing builds and sells...Ch. 3 - Salvador Manufacturing builds and sells...Ch. 3 - Use the information from the previous exercises...Ch. 3 - Company A has current sales of $10,000,000 and a...Ch. 3 - Marshall s target margin of safety be in units and...Ch. 3 - Calculate the per-unit contribution margin of a...Ch. 3 - Calculate the per-unit contribution margin of a...Ch. 3 - A product has a sales price of $175 and a per-unit...Ch. 3 - A product has a sales price of $90 and a per-unit...Ch. 3 - Cadre, Inc., sells a single product with a selling...Ch. 3 - Kerr Manufacturing sells a single product with a...Ch. 3 - Delta Co. sells a product for $150 per unit. The...Ch. 3 - Shonda & Shonda is a company that does land...Ch. 3 - Baghdad Company produces a single product. They...Ch. 3 - Keleher Industries manufactures pet doors and...Ch. 3 - Manufacturing builds and sells switch harnesses...Ch. 3 - Manufacturing builds and sells switch harnesses...Ch. 3 - Use the information from the previous exercises...Ch. 3 - Company A has current sales of $4,000,000 and a...Ch. 3 - Best Wholesale recently calculated their...Ch. 3 - A company sells small motors as a component part...Ch. 3 - A company manufactures and sells racing bicycles...Ch. 3 - Fill in the missing amounts for the four...Ch. 3 - Markham Farms reports the following contribution...Ch. 3 - Kylies Cookies is considering the purchase of a...Ch. 3 - Morris Industries manufactures and sells three...Ch. 3 - Manatoah Manufacturing produces 3 models of window...Ch. 3 - Jakarta Company is a service firm with current...Ch. 3 - A company sells mulch by the cubic yard. Grade A...Ch. 3 - A company manufactures and sells blades that are...Ch. 3 - Fill in the missing amounts for the four...Ch. 3 - West Island distributes a single product. The...Ch. 3 - Wellington, Inc., reports the following...Ch. 3 - Karens Quilts is considering the purchase of a new...Ch. 3 - Abilene Industries manufactures and sells three...Ch. 3 - Tim-Buck-Il rents jet skis at a beach resort....Ch. 3 - Fire Company is a service firm with current...Ch. 3 - Mariana Manufacturing and Bellow Brothers compete...Ch. 3 - Roald is the sales manager for a small regional...Ch. 3 - As a manager, you have to choose between two...Ch. 3 - Coutures Creations is considering offering Joe, an...
Additional Business Textbook Solutions
Find more solutions based on key concepts
Name the three types of legal business structure. Describe one advantage and one disadvantage of each.
Principles of Accounting Volume 1
E3-22 Journalizing adjusting entries
Learning Objective 3
Consider the following independent situations at...
Horngren's Accounting (12th Edition)
With good internal controls, the person who handles cash can also
Learning Objective 1
account for cash paym...
Horngren's Accounting (11th Edition)
The accounting assumption that governs given situation.
Financial Accounting (11th Edition)
If Oxbow Corporation dees not record a sale mace on account in December until a month later when the customer p...
Financial Accounting (12th Edition) (What's New in Accounting)
What has been regarded as normal spoilage in the past is not necessarily acceptable as normal spoilage in the p...
Cost Accounting (15th Edition)
Knowledge Booster
Similar questions
- If the sales mix in a multi-product environment shifts to a higher volume in low contribution margin products, the break-even point will ____________________________________ . A. remain unchanged because all products are included in the calculation of break-even B. increase because the low contribution margin products have little effect on break-even C. increase because the per composite unit contribution margin will decrease D. decrease because the per composite unit contribution margin will increasearrow_forwardThe 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_forwardAssume you are the department B manager for Marleys Manufacturing. Marleys operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only o department B (they have no outside sales). After calculating the operating income in dollars and operating income in percentage, analyze the following financial information to determine costs that may need further investigation. (Hint: It may be helpful to perform a vertical analysis.)arrow_forward
- In a cost-volume-profit analysis, explain what happens at the break-even point and why companies do not want to remain at the break-even point.arrow_forwardWhat can the weighted average contribution margin ratio be used for? To solve for a measure, at any level of sales volume, of the sensitivity of operating profit to changes in volume. Breakeven and profit planning for sales volume expressed in dollars (Y) rather than units (Q). To calculate an average per-unit contribution margin based on an assumed sales mix. To figure out the relative proportion in which a company’s products (or services) are sold. To determine the extent of fixed costs in an organization’s cost structure.arrow_forwardCost-volume-profit (CVP) analysis with multiple products assumes that sales will continue at the same mix of products, expressed in either sales units or sales dollars. This assumption is essential, because a change in the product mix will probably change (pick one below): The average sales price per unit. The total fixed cost. The weighted-average contribution margin (per unit or ratio). The average contribution margin (per unit or ratio). The average variable cost per unit.arrow_forward
- Describe how total variable costs and unit variable costs behave with changes in the level of activity. Describe how total fixed costs and unit fixed costs behave with changes in the level of activity. In applying the high-low method of cost estimation to mixed costs, how is the total fixed cost estimated? How does the sales mix affect the calculation of the break-even point? Cite and give credit to the author that you are citing.arrow_forwardDescribe how total variable costs and unit variable costs behave with changes in the level of activity. Describe the behavior of (a) total fixed costs and (b) unit fixed costs as the level of activity increases. In applying the high-low method of cost estimation, how is the total fixed cost estimated? An examination of the accounting records of Larredo Company disclosed a high contribution margin ratio and production at a level below maximum capacity. Based on this information, suggest a likely means of improving operating income. If the unit cost of direct materials is decreased, what effect will this change have on the break-even point? What does operating leverage measure, and how is it computed?arrow_forwardTwo companies have identical fixed expenses, unit variable expenses, and profits. Yet one company has a much lower price for its product. Explain how this can happen. Support your answer with a comparative contribution margin income statement.arrow_forward
- 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.arrow_forwardExplain the difference between the economist Cost-Volume-Profit (CVP) analysis model and the accountant CVP analysis model.C. The Mathematical Equation Method and Contribution Margin Method is a method used to calculate Break-Even Point (BEP) for a single product. Is there any different in the calculated amount of BEP between the two (2) methods? Justify your answer.arrow_forwardAnswer 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.…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning