Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 3, Problem 4Q
In a cost-volume-profit analysis, explain what happens at the break-even point and why companies do not want to remain at the break-even point.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Is there a point in a cost-volume-profit analysis when the company is expected to profit?
What information is conveyed by a cost-volume-profit graph in addition to a company’s break-even point?
The 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.
Chapter 3 Solutions
Principles of Accounting Volume 2
Ch. 3 - The amount of a units sales price that helps to...Ch. 3 - A companys product sells for $150 and has variable...Ch. 3 - A companys product sells for $150 and has variable...Ch. 3 - A companys contribution margin per unit is $25. It...Ch. 3 - A company sells its products for $80 per unit and...Ch. 3 - If a company has fixed costs of $6.000 per month...Ch. 3 - Company A wants to earn $5,000 profit in the month...Ch. 3 - A company has wants to earn an income of $60,000...Ch. 3 - A company has pre-tax or operating income of...Ch. 3 - When sales price increases and all other variables...
Ch. 3 - When sales price decreases and all other variables...Ch. 3 - When variable costs increase and all other...Ch. 3 - When fixed costs decrease and all other variables...Ch. 3 - When fixed costs increase and all other variables...Ch. 3 - If the sales mix in a multi-product environment...Ch. 3 - Break-even for a multiple product firm. can be...Ch. 3 - Waskowski Company sells three products (A. B. and...Ch. 3 - Beaucheau Farms sells three products (E, F, and G)...Ch. 3 - A company sells two products, Model 101 and Model...Ch. 3 - Wallace Industries has total contribution margin...Ch. 3 - Macom Manufacturing has total contribution margin...Ch. 3 - If a firm has a contribution margin of $59,690 and...Ch. 3 - If a firm has a contribution margin of $78M90 and...Ch. 3 - Define and explain contribution margin on a per...Ch. 3 - Define and explain contribution margin ratio.Ch. 3 - Explain how a contribution margin income statement...Ch. 3 - In a cost-volume-profit analysis, explain what...Ch. 3 - What is meant by a products contribution margin...Ch. 3 - Explain how a manager can use CVP analysis to make...Ch. 3 - After conducting a CVP analysis, most businesses...Ch. 3 - Explain how for is possible for costs to change...Ch. 3 - Explain what a sales mix is and how changes in the...Ch. 3 - Explain how break-even analysis for a...Ch. 3 - Explain margin of safety and why it is an...Ch. 3 - Define operating leverage and explain its...Ch. 3 - Calculate the per-unit contribution margin of a...Ch. 3 - Calculate the per-unit contribution margin of a...Ch. 3 - A product has a sales price of $150 and a per-unit...Ch. 3 - A product has a sales price of $250 and a per-unit...Ch. 3 - Maple Enterprises sells a single product with a...Ch. 3 - Marlin Motors sells a single product with a...Ch. 3 - Flanders Manufacturing is considering purchasing a...Ch. 3 - Marchete Company produces a single product. They...Ch. 3 - Brahma Industries sells vinyl replacement windows...Ch. 3 - Salvador Manufacturing builds and sells...Ch. 3 - Salvador Manufacturing builds and sells...Ch. 3 - Use the information from the previous exercises...Ch. 3 - Company A has current sales of $10,000,000 and a...Ch. 3 - Marshall s target margin of safety be in units and...Ch. 3 - Calculate the per-unit contribution margin of a...Ch. 3 - Calculate the per-unit contribution margin of a...Ch. 3 - A product has a sales price of $175 and a per-unit...Ch. 3 - A product has a sales price of $90 and a per-unit...Ch. 3 - Cadre, Inc., sells a single product with a selling...Ch. 3 - Kerr Manufacturing sells a single product with a...Ch. 3 - Delta Co. sells a product for $150 per unit. The...Ch. 3 - Shonda & Shonda is a company that does land...Ch. 3 - Baghdad Company produces a single product. They...Ch. 3 - Keleher Industries manufactures pet doors and...Ch. 3 - Manufacturing builds and sells switch harnesses...Ch. 3 - Manufacturing builds and sells switch harnesses...Ch. 3 - Use the information from the previous exercises...Ch. 3 - Company A has current sales of $4,000,000 and a...Ch. 3 - Best Wholesale recently calculated their...Ch. 3 - A company sells small motors as a component part...Ch. 3 - A company manufactures and sells racing bicycles...Ch. 3 - Fill in the missing amounts for the four...Ch. 3 - Markham Farms reports the following contribution...Ch. 3 - Kylies Cookies is considering the purchase of a...Ch. 3 - Morris Industries manufactures and sells three...Ch. 3 - Manatoah Manufacturing produces 3 models of window...Ch. 3 - Jakarta Company is a service firm with current...Ch. 3 - A company sells mulch by the cubic yard. Grade A...Ch. 3 - A company manufactures and sells blades that are...Ch. 3 - Fill in the missing amounts for the four...Ch. 3 - West Island distributes a single product. The...Ch. 3 - Wellington, Inc., reports the following...Ch. 3 - Karens Quilts is considering the purchase of a new...Ch. 3 - Abilene Industries manufactures and sells three...Ch. 3 - Tim-Buck-Il rents jet skis at a beach resort....Ch. 3 - Fire Company is a service firm with current...Ch. 3 - Mariana Manufacturing and Bellow Brothers compete...Ch. 3 - Roald is the sales manager for a small regional...Ch. 3 - As a manager, you have to choose between two...Ch. 3 - Coutures Creations is considering offering Joe, an...
Additional Business Textbook Solutions
Find more solutions based on key concepts
LIFO, Conversion to FIFO. Inventory transactions tor Jack Franklin stores are summarized in the following table...
Intermediate Accounting (2nd Edition)
(Record inventory transactions in the periodic system) Wexton Technologies began the year with inventory of 560...
Financial Accounting (11th Edition)
Issued stock is defined as stock that ________. A. is available for sale B. that is held by the corporation C. ...
Principles of Accounting Volume 1
Discussion Questions 1. What characteristics of the product or manufacturing process would lead a company to us...
Managerial Accounting (4th Edition)
What is the difference between an allowance and a reimbursement? How does this difference affect labor burden?
Construction Accounting And Financial Management (4th Edition)
Based on your answers to the above questions, should Lockwood invest in the machinery?
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Knowledge Booster
Similar questions
- In a cost-volume-profit analysis, explain what happens at the break-even point and whyarrow_forwardWhy do firms not have sunk costs over time? How should managers approach sunk costs when deciding whether to enter a market or remain in it?arrow_forward. A company can use cost-volume-profit analysis to determine the level of sales required to earn a target profit. TRUE OR FALSEarrow_forward
- A Cost-Volume-Profit graph contains an "Area of Loss" and an "Area ofProfitability". Which of the following best explains the difference between thetwo points on the graph? A. The area of loss represents the difference between Sales and Variable Cost.B. The area of loss begins with the concept that fixed costs have to be recovered priorto sales contributing to profit.C. The area of profit represents the difference between Sales and Variable Cost.D. The area of profit begins with the concept that no company would have any level ofsales below the break-even point.arrow_forwardWhy do companies allocate costs? What are some of the advantages and disadvantages to doing so?arrow_forwardin a cost volume profit analysis explain what happen at the break even point and why company do not want to remain at the break even pointarrow_forward
- What analysis ensures that the income for the firm will cover its variable costs? a. ratio analysis b. financial analysis c. cost volume profit analysis d. sales analysisarrow_forwardWhich of the following is not an assumption underlying cost-volume-profit analysis?a. The sales mix is constant.b. The break-even point will be passed during the period.c. Total sales and total costs can be represented by straight lines.d. Costs can be accurately divided into fixed and variable components.arrow_forwardWhich of the following is not an assumption underlying cost-volume-profit analysis? a.The break-even point will be passed during the period. b.Total sales and total costs can be represented by straight lines. c.Costs can be accurately divided into fixed and variable components. d.The sales mix is constant.arrow_forward
- For CVP analysis calculations, which of the following statements is correct? A. In target profit calculations, sales revenue is less than total costs. B. CVP analysis relies on our knowledge of cost function to express relationships among costs, sales volume, and profit. OC. A company's sales mix is ultimately determined by the management of a company. D. The Break-even point is the point at which operating income is greater than $0. O E. If sales volume is expected to be higher than the indifference point, management should choose the cost structure with the higher fixed costs.arrow_forwardWhich tool can be used to easily calculate the change in profit resulting from a change in sales price, sales volume, variable costs, or fixed costs?arrow_forwardCost-volume-profit analysis is used to make many decisions, including product pricing and controlling costs. How does good operating leverage magnify earnings results with modest revenue increase?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning