Discuss the following components of break-even analysis: fixed costs, variable and semi-variable costs, and contribution margin. How does cash flows versus accounting flows affect break-even?

Q: RUE OR FALSE Net income under GAAP highlights differences between variable and fixed costs.

A: Answer:   Net income under GAAP highlights differences between variable and fixed costs.   The…

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: how does the contribution margin pricing method differ from ratio pricing method?

A: The question is based on the concept of pricing policy and methods. The product's price can be…

Q: The lessor’s initial direct costs often are substantial. What are initial direct costs?

A: The costs which are associated directly with originating a lease and are essential to acquire the…

Q: Illustrate a break-even analysis scenario in the resturant industry. Discuss the relevant fixed…

A: A break-even point means where contribution margin of a company is equal to its Fixed Cost.

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: In what sense can a variable cost be considered constant?

A: A variable cost is a constant amount per unit produced or used.Therefore the total amount of the…

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: Give an example of how a manager can decrease variable costs while increasing fixed costs?

A: Variable Cost: Variable costs are costs which are directly vary with the change in production.…

Q: My question is asking the amount of the total variable expense. Please help.

A: Variable expenses are those which do not remain constant. These expense keeps on varying with the…

Q: Show the effects oncontribution margin of changesin variable costs, fixed costs,selling price, and…

A: Cost-Volume-Profit (CVP) Analysis: It is a method followed to analyze the relationship between the…

Q: What effect do minor deviations from the EOQ have on totalinventory cost?

A: Minor variations from the EOQ will not in general highly affect the total inventory cost except if…

Q: Explain the following terms: incremental cash flow, sunk cost, opportunity cost,externality, and…

A: Incremental cash flow: Incremental cash flow is the extra functioning cash flow that an association…

Q: How do managers decide whether a cost is avariable or a fixed cost?

A: Cost refers to the amount of money incurred for acquiring a product or manufacturing a product. Cost…

Q: How would an Increase in total fixed costs affect the break-even point and the margin of safety?

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

Q: If a firm's current revenues are less than its current variable costs. Explain.

A: Revenues are the amount received from sale of goods and services in the business. Variable costs are…

Q: Describe the downward demand spiral and its implications for pricing decisions.

A: Downward Demand Spiral: A downward demand spiral is a continuing reduction in the demand for a…

Q: Is this statement true or false? Can you please explain in detail. There is a difference between…

A: Firstly let us understand what is the theoretical production capacity is the optimum production…

Q: What is the difference between an accounting break-even and a break-even NPV? Which will offer the…

A:

Q: What is the correlation between fixed, variable, and semi-variable costs??

A: Introduction:- Fixed Costs – Costs are same irrespective of the number of output produced Variable…

Q: Why might it be misleading to show the fixed costs on a per unit basis?

A: Fixed Costs are those costs that do not change in aggregate in relation to the level of production…

Q: What is the difference between an accounting break-even and a break-even NPV? Which will offer the…

A: Break-even point = Total Fixed Costs / Contribution margin per unit   Break-even ratio = Annually…

Q: What is the relationship among fixed costs, contribution margin, and thebreak-even point?

A: Fixed costs: These are the costs incurred by the organization irrespective of the volume of…

Q: “All this marginal revenue and marginal cost stuff is just theory. Prices are determined by…

A: Pricing decisions:   Pricing decisions is one of the most important and required decision for the…

Q: If fixed costs increase, what would be the impact on the (a) contribution margin?

A: Fixed cost means the cost which do not vary with the level of output where as variable cost will…

Q: Give an example of how a manager can increase variable costs while decreasing fixed costs?

A: Fixed costs refers to those which do not change according to the change in units of productions.…

Q: Define the term break-even point. What is the variable cost ratio? The contribution margin ratio?…

A: 1. Break-even point: It is a point where the total costs and the total sales of a company are said…

Q: “In CVP analysis, gross margin is a less-useful concept than contribution margin.” Do you agree?…

A: Contribution Margin:Contribution margin is the excess of selling price over the variable costs of a…

Q: Which of the following describes the behavior of total variable and total fixed costs when level of…

A: Different costs associated with production process are - Fixed cost and variable cost. For example:…

Q: How does targeted profit enter into the break-even units equation?

A: Every organisation desires to attain certain target profit.  Therefore the organisation makes an…

Q: Discuss the relationship between fixed costs, variable costs and risk.

A: 1. Fixed cost Fixed assets are assets that are used in an organization for the purpose of long-term…

Q: Profitability changes may be simply calculated by using what kind of tool: sales…

A: The net profits are calculated as difference between sales and total expenses.

Q: Why is the original cost estimate corrected based on buyout data?

A: Buyout process :              When a company acquires the controlling interest in another company,…

Q: Which of the following describes the behavior of the fixed cost per unit?             Decreases…

A: Fixed cost is the cost that remains constant irrespective of the level of production. Whereas…

Q: The margin of safety can be defined as the excess of budgeted sales over:  break-even sales. net…

A: Cost-volume profit analysis: It can be defined as a cost accounting method that shows the impact of…

Q: What are the disadvantages of cutting expenses and costs , when it comes to working capital and…

A: Working Capital Working Capital is treated as one of the important element of the business entity…

Q: What's the expected profit at break-even in a cost-volume-profit analysis

A: Introduction : The cost volume profit analysis examines the relationship between the variable and…

Q: Explain the behavioral problem that can result when cost-plus prices are based on variable cost.

A: Following is the answer to the given question