Answered: The amount of a unit’s sales price that…

The amount of a unit’s sales price that helps to cover fixed expenses is its ________.A. contribution marginB. profitC. variable costD. stepped cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

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The amount of a unit’s sales price that helps to cover fixed expenses is its ________.
A. contribution margin
B. profit
C. variable cost
D. stepped cost

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Contribution margin is it Sales less cost of goods sold or Sales less all variable and fixed expenses.
All of the following represents a cost -volume -profit relationship except : a. Profit = totalcon contribution margin - fixed expenses b. Sales = totalexpenses + profit c. Sales - Variable expenses = fixed expenses - profit d. Sales - variable expenses - profit = fixed expenses e. Total contribution margin + variable expenses = variable expenses + fixed expenses + profit
Approaches to uture is commonly known as anaging changes to organitional processes and their structures and ther impact on staff and a Communication b. Change Management C Management Culture d. Business transformation E-change Management The number of sbordinates who report directly to an eecuive or supervisors known as the a Locus of control b Division of labor C degree of standardization d. Degree of specialization span of control
7. Which of the following is a correct formula to calculate contribution margin ratio (CM ratio)? a. Contribution margin/Sales b. Contribution margin/Variable cost c. Contribution margin/Fixed cost d. Sales/Contribution margin
When using the high-low method to estimate costs, the formula “Change in Cost divided by Change in Units” (or “Change in Total Cost divided by Change in Activity Level”) is used to estimate the: Fixed cost per unit Mixed cost per unit Profit per unit Indirect cost per unit Variable cost per unit Differential cost per unit Opportunity cost per unit
Which of the following is a correct definition of the margin of safety? The excess of contribution margin over fixed costs The excess of gross margin over target income 0 The excess of sales revenue over the breakeven point The excess of ner income over all costs (both variable and fixed
Distinguish between fixed and variable costs while dealing with semi-variable expenses.
Break-even is the number of units at which? a. total revenue equals price times quantity b. total revenue equals total variable cost c. total revenue equals total fixed cost d. total revenue equals total cost
The contribution-margin ratio is: Select one: a. unit contribution margin divided by the selling price b. the difference between the selling price and the variable cost per unit. c. unit contribution margin divided by fixed cost per unit. d. variable cost per unit divided by the selling price e. fixed cost per unit divided by variable cost per unit.
The “plus” in cost-plus pricing is often referred to as Markup. Extra profit. Gross profit. Margin of Safety.
On a cost-volume-profit graph, the revenue line will be shown below the total expense line for any activity level above the break-even point. FALSE O TRUE
Contribution margin dividedt by Income is the: Multiple Choice Contribution margin ratio. Margin of safety. Degree of operating leverage. Sales mix. Break-even point in units.