Answered: The contribution margin equals sales…

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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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.
All of the following represents a cost-volume-profit relationship except: a. Total contribution margin + variable xpenses = variable expenses + fixed expenses profit b. Sales = totalexpe expenses + profit O cSales - variable senses + profit = fied expenses O d. Profit = totalcontri contribution margin- fixed expenses O e Sales - Variable expenses = fixed expenses + profit
In cost-volume-profit analysis, what is the estimated profit at the break-even point?
Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed Net income (loss) Continue LA $ Eliminate LA Net Income Increase (Decrease)
The break-even point can be calculated with the following formula: Total fixed expenses / (Variable cost per unit Selling price per unit)TRUEFALSE
Change in operating income = change in sales dollars x contribution margin What is the equation for the "change in sales dollars"?
6. The unit contribution margin is computed by⦁ subtracting the variable cost per unit from the sales price per unit.⦁ dividing the sales revenue by variable cost per unit.⦁ dividing the variable cost per unit by the sales revenue.⦁ subtracting the sales price per unit from the variable cost per unit.
What does the term sales mix mean? How is a weighted-average unit contribution margin computed?
3. The result of the fixed expenses divided by the unit contribution margin refers to the: * Margin of safety Contribution margin ratio Break-even point in unit sales Break-even point in dollar sales None of the above 4. Which of the following statements is correct concerning the variable expenses per unit within the relevant range? * The variable expenses per unit remain constant as the activity changes The variable expenses per unit increase as the activity increases The variable expenses per unit decrease as the activity increases The variable expenses per unit can O increase or decrease as the activity changes
In the fixed cost per unit does the it increase as activity decreases and will decrease as activity increases?
At break even point: a) sales - contribution margin = net income or net loss b) sales - fixed expenses = variable expenses c) sales + variable expenses = contribution margin d) contribution margin + fixed expenses = net income
When the total contribution margin is greater than total fixed costs, a company has Select one: a. Higher variable cost and fixed cost. b. A net loss c. Zero profit. d. Net income.

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The contribution margin equals sales minus all O period O variable O fixed O product expenses.