:Holding other factors constant, a company's contribution margin per unit will increase with All answers given are NOT correct .a O any increase in variable cost per unit b C .any increase in quantity sold .c O any increase in the selling price per unit .d O increase in its total fixed costs .e O

:Holding other factors constant, a company's contribution margin per unit will increase with All answers given are NOT correct .a O any increase in variable cost per unit b C .any increase in quantity sold .c O any increase in the selling price per unit .d O increase in its total fixed costs .e O

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Company X has two products: Product A and product B. Product A has a higher selling price but a…

A: Solution Concept If a product line has high selling price but a lower contribution margin it implies…

Q: uestion 2 Which of the following occurs if a company increases its selling price per unit? (Assume…

A: The contribution margin is calculated as the difference between the sales and variable costs. The…

Q: A company observed a decrease in the cost per unit. All other things being equal, which of the…

A: The production iincludes of variable and fixed costs.

Q: ssume there is a reduction in the selling price and all other CVP parameters remain constant. This…

A: The contribution margin is calculated as the difference between the sales and variable costs. The…

Q: contribution margin will decrease if sales remain the same and:

A: Contribution Margin: The Contribution Margin is also can be treated on a gross or per unit basis.…

Q: Before a company reaches the breakeven point Select one: a. The fixed cost is equal to zero b. The…

A: Contribution is calculated as Sales less variable costs. Sale price is the price at which the…

Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…

A: Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the…

Q: What is the internal rate of return on an investment with the following cash flows? Year 10 1 2 13…

A: The IRR is a measure of a project’s profitability. It uses the NPV formula to find the maximum…

Q: If only the selling price per unit of a product increases (variable cost per unit and total fixed…

A: CVP analysis, or cost-volume-profit analysis, is a management accounting technique used to analyze…

Q: Variable costs _______ (pick all that apply) Group of answer choices 1) in total, change in direct…

A: Variable costs are the expenditure incurred on production of goods which changes in direct…

Q: XYZ Company wishes to gain more market share . In order to do that , the company is planning to…

A: Variable cost is a cost that remains the same on a per unit basis and varies according to units…

Q: Suppose that the elasticity of demand at a given price level is E(p)=.8. What does that mean? Select…

A: Answer -The company should lower the prices to raise revenues. Since 0<E(p)<1, demand is…

Q: iv) Why are two break-even points in the above diagram?

A: The vertical distance between TR and TC measures the profit or loss associated with any specific…

Q: 1. Fixed cost per unit Remains constant Increases when output increases Decreases…

A: Cost: It refers to the aggregated amount that is spent on manufacturing a product.

Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…

A: The contribution margin decides which product gives more profits to the company. The contribution is…

Q: The breakeven point increases if: O a. the selling price per unit increases O b. the total fixed…

A: 1) D is the correct answer Because The break-even point can increase once the number of fixed prices…

Q: The firm with the largest ratio of fixed costs to total costs automatically gets the greatest…

A: Lets understand the basics. Fixed cost is a cost which is fixed over a period of time. It includes…

Q: s total fixed expenses b. increasing the selling price per unit c.

A: Breakeven point is the point at which the fixed cost equals contribution margin. Contribution margin…

Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…

A: The costs when are covered with certain amount of revenue earned, such amount is treated as break…

Q: not lower a company's break-even point?

A: Option A is wrong because an increase in selling price will lower the break-even point. Option B is…

Q: 2. Consider the production functions given below: a. Suppose that the production function faced by a…

A: The objective of the question is to analyze the production function of a bread producer, determine…

Q: :Holding other factors constant, a company's contribution margin per unit will increase with All…

A: The contribution margin represents the portion of sales that is left after the deduction of variable…

Q: company's total sales remain same but the sales mix shifts toward selling more of the product with…

A: Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the…

Q: At the breakeven point Select one: O a. Sales will be equal to variable costs plus fixed costs b.…

A: Formula: Break even point in units = Fixed costs / contribution margin Contribution margin means…

Q: Which of the following would lead to the breakeven point of a product shifting to the left on a…

A: Break-even analysis is done in order to find out at what point the total cost will be equal to the…

Q: The contribution margin per unit will increase.

A: Fixed costs are costs or expenses in the economics and business sectors that do not alter with…

Q: The break-even point is that at which: Select one: O A. The level of activity at which the business…

A: Solution:- Break-even point is the point where the total costs of a business are equal to the total…

Q: If XYZ Company sells unit outputs that exceed the breakeven point, a. there will be an increase in…

A: CVP investigation takes a goose at the impact of deals volume minor departure from prices and…

Q: If there is an unplanned increase in inventories, aggregate planned expenditure is less than real…

A: Aggregate planned expenditure is the sum of the expenditure incurred on the consumption, planned…

Q: Would an increase in variable costs per unit cause a company’s break-even point to increase or…

A: The Breakeven point is that level of sales at which Contribution is equal to Fixed cost. In orher…

Q: Henderson Farms reports the following results for the month of November: Sales (10,000 units)…

A: Income statement is a financial statement that shows profitability, total revenue and total expenses…

Q: A firm can reduce its breakeven volume by: decreasing fixed costs. B) decreasing contribution…

A: The objective of the question is to identify the correct option that can help a firm reduce its…

Q: If Mazoon Company sells unit outputs that exceed the breakeven point there will be a profit .a total…

A: Break even point means a point where firm is neither earning profit nor incurring any loss. For…

Q: All else being equal, a $10.00 increase in a product's variable expense per unit accompanied by a…

A: An increase in sales and variable cost with the same value decreases the contribution margin ratio…

Q: When variable costs per unit increases, the gross margin will ceteris paribus. increase O decrease…

A: After deducting all costs directly related to producing the goods or services for sale, a company's…

Q: In the CVP analysis, Which of the following statements about the breakeven point is true? a.…

A: Cost volume profit analysis is useful to find out the different sales volume on the basis of…

Q: On the breakeven graph, the fixed cost line a) moves to the right as fixed cost increase.…

A: SOLUTION- BREAK EVEN GRAPH- IT IS A GRAPH WHICH PLOT TOTAL SALES AND TOTAL COST CURVES OF A COMPANY…

Q: Which one of the following statements is correct? O a. Avariable cost is a cost whose cost per unit…

A: The cost can be classified into two categories i.e fixed cost and variable cost. The FIxed cost…

Q: A firm can reduce its breakeven volume by: decreasing fixed costs. B) decreasing contribution…

A: The objective of the question is to identify the correct option that can help a firm reduce its…

Q: A dollar value increase in a product's selling price per unit accompanied by a similar dollar value…

A: Contribution Margin The Calculation of Contribution Margin Percentage which is calculated by Total…

Q: If total fixed costs increase, while selling price per unit and variable cost per unit remain the…

A: Break even point = fixed cost / ( sales price per unit -variable cost per unit if fixed cost…

Q: ot lower a company's break-even poin O increase selling prices O reduce variable costs O decrease…

A: The correct answer is Sell More units.

Q: If only the selling price per unit of a product increases (variable cost per unit and total fixed…

A: The break-even points indicate where the revenues are equal to costs. It means there is neither…

Question

:Holding other factors constant, a company's contribution margin per unit will increase with
All answers given are NOT correct
.a O
any increase in variable cost per unit .b O
.any increase in quantity sold
.c O
any increase in the selling price per unit .d O
increase in its total fixed costs
.e O

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

9
6..
If a company decreases its selling price for its products. The Increase? O Total cost O Cost plus pricing O Break even quantity. O Profit it
If the percentage change in operating income resulting from a given percentagechange in sales is higher than the percentage change in sales itself, thena. an increase in the selling price would not alter the contribution marginper unit.b. variable costs per unit have increased.c. variable costs have decreased in total.d. the company has operating leverage.e. the company has no fixed costs.
15. If the total contribution margin increases and fixed costs do not change, then net income can be expected to a. decrease by an equal amount. b. increase by an amount equal to the increase in contribution margin times the CM ratio. c. increase by an equal amount. d. none of these.
Which of the following is true when referring to fixed costs? I. Fixed costs remain constant in total throughout the relevant range. II. The trend in companies today is toward greater fixed costs relative to variable costs. III. As volume increases, unit fixed cost and total fixed cost will change. IV. Fixed costs increase in total throughout the relevant range. a. II only b. All but IV c. I and II d. All but III e. None of these
Which of the following costs are always incremental and relevant in decision analysis? a) Opportunity costs and sunk costs b) Avoidable costs and opportunity costs c) Only avoidable costs d) Avoidable costs and sunk costs Which of the following will increase a company's breakeven point? a) reducing its total fixed costs b) increasing the selling price per unit c) increasing variable cost per unit d) increasing contribution margin per unit
XYZ Company wishes to gain more market share. In order to do that, the company is planning to double the current production and sales quantity. At the same time, the company plans to decrease the selling price per unit by half. Assuming that the total fixed cost and the variable cost per unit remain unchanged, what would be the effect on ?profit .Cannot be determined using the information in the question a O Profit would remain unchanged b O Profit would decrease .c O None of the given answers .d O Profit would increase e O
If sales volume increases and all other factors remain constant, then the: O contribution margin ratio will increase. O margin of safety will increase. break-even point will decrease. O net operating income will decrease.
Which of the following items will not cause the company's ROA to increase? Multiple Choice O O Reducing costs. Reducing company assets without impacting sales. Increasing company assets. Increasing the selling price per unit. $
Each of a company's two product lines has a different contribution margin ratio . If the company's total sales remain the same but the sales mix shifts toward selling more of the product with the higher contribution ratio , which of the following is true ? O a Fixed cost will be constant . . the breakeven point will decrease . Ocall of the answers are true . d the average contribution margin ratio will increase . O e operating income will increase