Operating leverage predicts the effects of a given fixed cost on operating income when: Group of answer choices No sales discounts are allowed Sales volume changes Production volume changes Variable costs change
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- Operating leverage measures the: O Change in profit when sales changes. O Change in Contibution when sales changes. O Change in BEP when fixed cost changes. O Change in BEP when sales changes.Operating leverage measures the: 1. Change in profit when sales changes 2. change in contrribution when sales changes 3. change in BEP when fixed cost changes 4. change in BEP when sales changesWhat is the Breakeven formula when a profit is included: Group of answer choices c. Fixed Costs – Contribution Margin Variable Costs/ Profit Component None of the above Variable Costs + Profit Component/ Contribution Margin
- Contribution margin is Oa. profit Ob. the excess of sales over variable costs Oc. Oc. another term for volume in the "cost-volume-profit" analysis Od. the same as sales revenueThe measure that reflects an organization's variable and fixed cost relationship and indicates how a percentage change in sale from the current level will impact from the current level will impact profits is called the a. break-even point. b. contribution margin. ç. degree of operating leverage. d gross margin. e. margin of safety.Cost-Capacity calculation technique takes into account a constant exponent to relate different costs to their respective capacities. a. False b. True The potential percent gain or loss in changes of variable is taken into account by: a. break-even analysis b. sensitivity analysis c. present worth analysis d. cost-benefit analysis
- In a cost-volume-profit (CVP) graph, the intersection of the total sales line and the total expense line represents which of the following? Multiple Choice The break-even point The total fixed expenses The total variable expenses The total contribution marginHow 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…When using a variable costing system, the contribution margin discloses the excess of Revenues over fixed cost Projected revenues over the breakeven point Revenues over variable cost Variable cost over fixed cost
- Operating Leverage=Quantity×(Price per unit-Variable cost per unit)Quantity×(Price per unit-Variable cost per unit)-Fixed operating cost is the correct function?Analyse the diagram and following inter related concepts of break-even analysis.A. Break-even point and operating profitB. Sales revenue and total operating costC. Fixed operating costs and variable operating costsWhat is characteristic of variable costs within the relevant range? A. Decrease in total as as output increases B. Stay constant in total as output increases C. Decrease on a per-unit basis as output increases D. Stay constant on a per-unit basis as output changes
