Contribution margin Select one: a. None of the answers are correct O b. excludes variable selling costs from its calculation. O c. is calculated by subtracting total manufacturing costs per unit from sales revenue per unit. O d. is always the same as gross profit margin. e. equals sales revenue minus variable costs.

Contribution margin Select one: a. None of the answers are correct O b. excludes variable selling costs from its calculation. O c. is calculated by subtracting total manufacturing costs per unit from sales revenue per unit. O d. is always the same as gross profit margin. e. equals sales revenue minus variable costs.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 1MC: The amount of a units sales price that helps to cover fixed expenses is its ____________________. A....

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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
In the CVP analysis, the point of breakeven is where a. total sales revenues equal total fixed costs Ob. None of the given answers С. contribution margin equals total costs d. total sales revenues equal total variable costs е. total sales revenues plus the total variable costs equal total fixed costs
The contribution margin ratio can be calculated in all of the following ways except: a.1 − Variable cost ratio. b.Contribution margin per unit / Price. c.Total contribution margin / Total sales. d.Fixed costs / Contribution margin ratio. e.All of these choices are correct. Total contribution margin divided by total sales is the: a.contribution margin ratio. b.sales ratio. c.target income. d.margin of safety. e.indifference point.
Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs can be divided into variable and fixed components O b. Costs are nonlinear Fixed cost per unit is not constant О с. O d. Sales mix of products sold does not change e. Selling price per unit does not change with volume O O 0 O O
All else being equal, what happens to the unit contribution margin and the contribution margin ratio if the sales price per unit increases? Select one: a. None of the given answers. O b. Unit contribution margin decreases while contribution margin ratio increases. OBoth unit contribution margin and contribution margin.ratio are unchanged. Od. Both unit contribution margin and contribution manrgin ratio decrease. O e. Unit contribution margin increases and contribution margin ratio increases,
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 does not represent a cost-volume-profit analysis equation? a. Sales - fixed expenses - variable expenses = 0 O b. Profit = contribution margin fixed expenses O c. Sales = total expenses + profit O d. Sales + fixed expenses + profit = contribution margin + sales Ое. Contribution margin - fixed expenses + profit = 0 O
In describing the cost formula equation Y = a + bX, which of the following statements is NOT correct? (A As "X" increases "Y" increases. (B) "X" is the level of activity. In the high-low method, "b" equals change in activity divided by change in costs. "a" is the fixed component.
Contribution 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.profit
Select the correct statement concerning the below cost-volume-profit graph: Line E A O d. O e. O a. None b. At point B, profits equal total costs. O c. Line E is the total sales line. d. Line F is the Total sales line. e. The point identified by "B" is the breakeven point. The break-even point is where B Line F Oa. None O b. total sales equal total fixed costs. O c. total variable costs equal total fixed costs. total sales equal total variable costs. Line D contribution margin ratio equals total fixed costs. O a. 190 000 b. None OC. 0.73 22 The following monthly data are available for Lumberyard Company which produces only one product: Break-even level in sales of dollars: $530 000 Budgeted sales in dollars for the month of June: $720 000 d. 1 250 000 e. 1.35 How much is the margin of safety for the company for June?
All else being equal, what happens to the unit contribution margin and the contribution margin ratio if the sales price per unit decrease? Select one: O a. None of the given answers. O b. Both unit contribution margin and contribution margin ratio increase. O c. Unit contribution margin decreases and contribution margin ratio decreases. O d. Both unit contribution margin and contribution margin ratio are unchanged. O e. Unit contribution margin increases while contribution margin ratio decreases.
The break-even point is that level of activity where: Select one: O a. sales revenue eguals fixed cost. O b. variable cost equals fixed cost. Oc total contribution margin equals the sum of variable cost plus fixed cost. O d. sales revenue equals total variable.cost Oe. contribution margin equals fixed cost.