Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Chapter 1, Problem 5MC
To determine
Concept introduction:
Cost Volume Profit (CVP) Analysis:
The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.
To choose:
The correct impact of increase in number of units
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Students have asked these similar questions
In describing the cost formula equation, Y = a + bX, which of the following is correct:
Select one or more:
a. (a) means variable cost per unit
b. (X) means total variable cost
V c. (a) means fixed cost
d. (y) means total fixed costs
Which of the following statements related to CVP chart is not true?
O a.
To determine the variable cost per unit from a graph, the change in cost is divided by the change in units.
O b. The scatter graph method is a way to estimate the cost behavior by graphically connecting the two cost amounts
identified with the highest and lowest volume levels.
O c.
The slope of the total cost line determines the variable cost per unit.
O d. To calculate the total fixed cost from a graph is by multiplying a level of volume by the variable cost per unit found out
earlier and subtracting that from the total cost for that level of volume.
e.
The intercept between the total cost line on a graph and the y-axis determines the fixed cost.
f. None of the given answers.
A total cost equation can be used to predict future costs for various activity levels. Write the
total cost equation.
4.
In the total cost equation:
a)
What is the slope?
b)
What is the independent variable?
c)
What is the dependent variable?
Chapter 1 Solutions
Managerial Accounting
Ch. 1 - What is the primary difference between financial...Ch. 1 - Prob. 2QCh. 1 - Why are traditional, GAAP-based financial...Ch. 1 - Prob. 4QCh. 1 - consider the area within a 3-mile radius of your...Ch. 1 - What are the three basic functions of management?Ch. 1 - How are the three basic management functions...Ch. 1 - What are ethics and why is ethical behavior...Ch. 1 - Prob. 9QCh. 1 - Prob. 10Q
Ch. 1 - Prob. 11QCh. 1 - Prob. 12QCh. 1 - Why are businesses starting to incorporate...Ch. 1 - What factors does sustainability accounting...Ch. 1 - Think about your activities over the last week....Ch. 1 - Prob. 16QCh. 1 - Why is it important for managers to be able to...Ch. 1 - Prob. 18QCh. 1 - Prob. 19QCh. 1 - Explain the difference between relevant and...Ch. 1 - Prob. 21QCh. 1 - What are prime costs? Why have they decreased in...Ch. 1 - Prob. 23QCh. 1 - Why can't prime cost and conversion cost be added...Ch. 1 - Prob. 25QCh. 1 - Prob. 26QCh. 1 - Prob. 27QCh. 1 - Prob. 28QCh. 1 - Prob. 29QCh. 1 - Prob. 1MCCh. 1 - Prob. 2MCCh. 1 - Prob. 3MCCh. 1 - Prob. 4MCCh. 1 - Prob. 5MCCh. 1 - What is Garcia's total manufacturing cost? a....Ch. 1 - Prob. 7MCCh. 1 - What is Garcia's manufacturing overhead? a....Ch. 1 - Prob. 9MCCh. 1 - Which of the following would not be treated as a...Ch. 1 - MINI-EXERCISES Comparing Financial and Managerial...Ch. 1 - Prob. 4MECh. 1 - Prob. 5MECh. 1 - Prob. 6MECh. 1 - Prob. 8MECh. 1 - Prob. 9MECh. 1 - Prob. 10MECh. 1 - Identifying Direct and Indirect Costs for a...Ch. 1 - Prob. 12MECh. 1 - Identify sustainability issues affecting the...Ch. 1 - Classifying Costs Seth's Skateboard Company incurs...Ch. 1 - Calculation Costs Cotton White, Inc., makes...Ch. 1 - Prob. 7ECh. 1 - Prob. 8ECh. 1 - Classifying Costs Blockett Company makes...Ch. 1 - Prob. 10ECh. 1 - Prob. 12ECh. 1 - Prob. 13ECh. 1 - Explaining Effects of Cost Misclassification Donna...Ch. 1 - Prob. 4.1GAPCh. 1 - Prob. 4.2GAPCh. 1 - Prob. 4.3GAPCh. 1 - Prob. 3.1GBPCh. 1 - Prob. 3.2GBPCh. 1 - Classifying Costs, Calculating Total Costs, and...Ch. 1 - Prob. 4.2GBPCh. 1 - Classifying Costs, Calculating Total Costs, and...
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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
- On a graph, if a horizontal axis represents units of production and the vertical axis represents total costs, the total variable costs line would be shown as a(n): Question 4 options: horizontal line. vertical line. upward sloping line. downward sloping line.arrow_forwardIf the level of activity increases within the relevant range, which of the following will also increase? Check all that apply. Check All That Apply Variable cost per unit. Fixed cost per unit. Total variable cost. Total fixed cost. Total cost.arrow_forwardANSWER ALL THE GIVEN ITEMS. Write “True” if the statement is true and write “False” if the statement is false. 2. A variable cost will change in total in proportion to changes in the level of activity.3. A fixed cost is constant per unit of product.4. Cost accumulation, cost allocation, and cost objects are interrelated.5. A variable cost remains constant per unit, though in total increases as activity levels increase.6. If volume increases, both total variables and total fixed costs will increase.7. Decrease in the level of activity will cause total variable and total fixed costs to decrease.8. When graphed, total variable costs and total fixed costs are both assumed to be linear withinthe relevant range.9. Fixed cost is constant in total amount regardless of changes in activity level within the relevantrange.10. Cost function is an express that mathematically links costs, their behavior, and their cost driver.11. As volume decreases within the relevant range, variable cost per unit…arrow_forward
- Show how each of these costs will behave as the volume of activity decreases. Variable cost per unit Total variable cost Fixed cost per unit Total fixed cost A. Increase B. Decrease C. Remains the samearrow_forward4. In a typical cost formula a. Fixed costs are per unit and variable costs are per unit b. Fixed costs are per unit and variable costs are in total c. Fixed costs are in total and variable costs are in total Fixed costs are in total and variable costs are per unitarrow_forwardIn describing the cost formula equation, Y = a + bX, which of the following is correct?a. “Y” is the independent variableb. “a” is the variable cost per unitc. “a” and “b” are valid for all levels of activityd. in the high-low method, “b” equals the change in cost divided by the change in activity.arrow_forward
- Which of the following statements is CORRECT with respect to fixed costs per unit? Select one: A.They will decrease as production decreases. B.They will increase as production increases. C.They will increase as production decreases. D.They will remain the same as production levels change.arrow_forward1.) Explain the effects of an increase in the volume of activity on the following costs. (Assume volume remains within the relevant range .) a. Total variable costs. b. Variable cost per unit. Total fixed cpst . d. Fixed cost per unit. e. Total semi variable costs. f. Semi variable cost per unit .arrow_forwardWhich of the following statements is CORRECT with respect to fixed costs per unit? Select one: A. They will decrease as production decreases. B. They will remain the same as production levels change. C. They will increase as production increases. D. They will increase as production decreases.arrow_forward
- Which of the following statements is TRUE? O A. Variable costs per unit decrease as production levels increase. O B. Fixed costs per unit decrease as production levels increase. OC. Total indirect costs are always greater than total direct costs. O D. Direct costs are usually overheads.arrow_forwardSolve 2 questions numbers 5 and 9 with steps please.arrow_forwardSuppose that the cost of producing X units of a product in a manufacturing company is F + VX where F = Total fixed cost and V = Variable cost per unit. The actual cost of producing X units is Co and this increases to C, when the actual number of units increases to X1. Using the high-low method which formula below represents the estimated value of the unit variable cost, V? A. (C1 – Co) / (X1 – Xo) B. (X1 - Xo) / (C1 – Co) C. (X1 Xo) / (Co-C1) D. (C1 - Co) / (Xo-X1)arrow_forward
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