FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
1.Which of the following is true if a company can accept a special order without affecting its regular sales and is within plant capacity?
Group of answer choices
Net income will increase if the special sales price per unit exceeds the unit variable costs.
Net income will not be affected.
Additional fixed costs will probably be incurred.
Net income will decrease.
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- Which one of the following statement is not correct? O Both fixed and variable costs influence short-term decision-making. O Short-term decision-making is all about analysing those costs that will change as a result of taking a particular action. O Opportunity costs are only considered when resources are limited. O Break-even analysis is used to determine how many units of a product or a service a business has to sell to cover all its costs.arrow_forward1. If only the selling price per unit of a product increases (variable cost per unit and total fixed costs do not change), Using Break Even Analysis, provide a unique mathematical example to support the break even point decreasingarrow_forwardWhich 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 thesearrow_forward
- 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. $arrow_forwardEach 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 increasearrow_forward
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