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 5, Problem 7MC
To determine
Contribution Margin Ratio:
Contribution Margin is the amount of sales after adjusting variable costs. Contribution Margin ratio is calculated with the help of following formulas:
To choose:
The correct option for contribution margin
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Students have asked these similar questions
The total contribution margin is equivalent to the combined net profit and fixed costs. It can be computed also by adding sales and variable costs. a. Both statements are correct.b. Both statements are false.c. Only the first statement is correct.d. Only the second statement is correct.
The contribution margin ratio can be calculated in all of the following ways except:
a.1 − Variable cost ratio.
b.Contribution margin per unit / Price.
c.Total contribution margin / Total sales.
d.Fixed costs / Contribution margin ratio.
e.All of these choices are correct.
Total contribution margin divided by total sales is the:
a.contribution margin ratio.
b.sales ratio.
c.target income.
d.margin of safety.
e.indifference point.
Which of the following is contribution margin?
Group of answer choices
Excess of sales revenue over total variable costs.
Excess of sales revenue over costs of goods sold.
Excess of sales revenue over variable costs of goods sold.
All of the answer choices are correct.
Chapter 5 Solutions
Managerial Accounting
Ch. 5 - Define each of the following terms variable cost,...Ch. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - Prob. 5QCh. 5 - Describe the three methods used to estimate cost...Ch. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - Which of the following increases when activity...Ch. 5 - Prob. 2MCCh. 5 - Prob. 3MCCh. 5 - Consider the following information for a local...Ch. 5 - Prob. 5MCCh. 5 - Prob. 6MCCh. 5 - Prob. 7MCCh. 5 - Prob. 8MCCh. 5 - Prob. 9MCCh. 5 - Hathaway Corp, manufactures garden hoses. Last...Ch. 5 - Identifying Cost Behavior Heather Oak is trying to...Ch. 5 - Prob. 2MECh. 5 - Defining Cost Behavior Match each of the following...Ch. 5 - Prob. 4MECh. 5 - Defining Terms for the High-Low Method Indicate...Ch. 5 - Prob. 6MECh. 5 - Prob. 7MECh. 5 - Prob. 8MECh. 5 - Prob. 9MECh. 5 - Prob. 10MECh. 5 - Prob. 11MECh. 5 - Prob. 12MECh. 5 - Prob. 13MECh. 5 - Prob. 14MECh. 5 - Prob. 15MECh. 5 - Prob. 16MECh. 5 - Compare full absorption costing to variable...Ch. 5 - Identifying Cost Behavior Patterns Steve...Ch. 5 - Prob. 2ECh. 5 - Prob. 3ECh. 5 - Prob. 4ECh. 5 - Estimating Cost Behavior Using High-Low Method...Ch. 5 - Prob. 6ECh. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - Estimating Cost Behavior Using Scattergraph and...Ch. 5 - Estimating Cost Behavior Using Least-Squares...Ch. 5 - Comparing High-Low Method and Least-Squares...Ch. 5 - Preparing Contribution Margin Income Statement...Ch. 5 - Determining Cost Behavior, Preparing Contribution...Ch. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Prob. 17ECh. 5 - Prob. 18ECh. 5 - Comparing Full Absorption Costing and Variable...Ch. 5 - Estimating Cost Behavior Using Least-Squares...Ch. 5 - Prob. 1.1GAPCh. 5 - Prob. 1.2GAPCh. 5 - Prob. 1.3GAPCh. 5 - Prob. 1.4GAPCh. 5 - Prob. 1.5GAPCh. 5 - Prob. 1.6GAPCh. 5 - Prob. 2.1GAPCh. 5 - Prob. 2.2GAPCh. 5 - Prob. 2.3GAPCh. 5 - Prob. 2.4GAPCh. 5 - Prob. 2.5GAPCh. 5 - Prob. 2.6GAPCh. 5 - Prob. 2.7GAPCh. 5 - Prob. 3.1GAPCh. 5 - Prob. 3.2GAPCh. 5 - Prob. 3.3GAPCh. 5 - Prob. 3.4GAPCh. 5 - Prob. 3.5GAPCh. 5 - Prob. 4.1GAPCh. 5 - Prob. 4.2GAPCh. 5 - Prob. 4.3GAPCh. 5 - Comparing Full Absorption and Variable Costing...Ch. 5 - Comparing Full Absorption and Variable Costing...Ch. 5 - Prob. 5.3GAPCh. 5 - Prob. 6.1GAPCh. 5 - Prob. 6.2GAPCh. 5 - Prob. 6.3GAPCh. 5 - Prob. 6.4GAPCh. 5 - Prob. 6.5GAPCh. 5 - Prob. 6.6GAPCh. 5 - Prob. 1.1GBPCh. 5 - Prob. 1.2GBPCh. 5 - Prob. 1.3GBPCh. 5 - Prob. 1.4GBPCh. 5 - Estimating Cost Behavior Using Scattergraph,...Ch. 5 - Prob. 1.6GBPCh. 5 - Prob. 2.1GBPCh. 5 - Estimating Cost Behavior Using Scattergraph,...Ch. 5 - Prob. 2.3GBPCh. 5 - Prob. 2.4GBPCh. 5 - Prob. 2.5GBPCh. 5 - Prob. 2.6GBPCh. 5 - Prob. 2.7GBPCh. 5 - Prob. 3.1GBPCh. 5 - Prob. 3.2GBPCh. 5 - Prob. 3.3GBPCh. 5 - Prob. 3.4GBPCh. 5 - Prob. 3.5GBPCh. 5 - Prob. 4.1GBPCh. 5 - Prob. 4.2GBPCh. 5 - Prob. 4.3GBPCh. 5 - Prob. 5.1GBPCh. 5 - Prob. 5.2GBPCh. 5 - Prob. 5.3GBPCh. 5 - Prob. 6.1GBPCh. 5 - Prob. 6.2GBPCh. 5 - Prob. 6.3GBPCh. 5 - Prob. 6.4GBPCh. 5 - Prob. 6.5GBPCh. 5 - Prob. 6.6GBP
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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
- Which of the following statements correctly complete the sentence:"Gross Margin equals":I. sales revenue less (minus) cost of goods sold.II. contribution margin less (minus) fixed costs.III. operating income plus all period costs.IV. sales revenue less (minus) cost of goods manufactured.arrow_forwardIn the cost-volume-profit graph,a. the break-even point is found where the total revenue curve crosses the x-axis.b. the area of profit is to the left of the break-even point.c. the area of loss cannot be determined.d. both the total revenue curve and the total cost curve appear.e. neither the total revenue curve nor the total cost curve appear.arrow_forwardThe difference between sales and marginal cost is______________ a. Fixed Cost b. Profit c. Sales price d. Contributionarrow_forward
- Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs are linear b. Sales mix of products sold does not change c. Selling price per unit changes with volume d. Costs can be divided into variable and fixed components e. Fixed cost per unit is not constantarrow_forwardConsider the following two statements concerning cost-volume-profit analysis. (1) The contribution per unit is the difference between the sales price per unit and the fixed costs per unit. (2) The marginal cost per unit will usually equal the variable cost per unit. Which one of the following combinations ( true/false) relating to the above statements is correct?arrow_forwardA 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_forward
- In a CVP income statement, cost of goods sold is generally completely a variable cost. completely a fixed cost. neither a variable cost nor a fixed cost. O broken down into its variable and fixed cost components.arrow_forwardAnswer the following: 1. The slope of line A is equal to the: a. fixed cost per unit. b. selling price per unit. c. profit per unit. d. semivariable cost per unit. e. unit contribution margin. 2. Line C represents the level of: a. fixed cost. b. variable cost. c. semivariable cost. d. total cost. e. mixed cost. 3. Line B represents the level of: a. fixed cost. b. variable cost. c. semivariable cost. d. total cost. e. mixed cost. 4. The slope of line B is equal to the: a. fixed cost per unit. b. selling price per unit. c. variable cost per unit. d. profit per unit. e. unit contribution margin. 5. Line A is the: a. total revenue line. b. Option 2 c. fixed cost line. d. variable cost line. e. total cost line. f. profit line.arrow_forwardContribution margin is a.the same as sales revenue b.the excess of sales over variable costs c.another term for volume in the "cost-volume-profit" analysis d.profitarrow_forward
- 1. Which of the following is TRUE about contribution margin? Select one: A. The amount remaining after cost of goods sold has been deducted from sales revenues. B. The amount remaining fixed costs have been deducted from sales revenue. C. The amount remaining after fixed costs have been deducted from variable costs. D. The amount remaining after variable costs have been deducted from sales revenue. 2. Which of the following financial statements reports information as of a specific date? Select one: A. Statement of Changes in Equity. B. Statement of Profit or Loss and other Comprehensive Income. C. Statement of Cash Flows. D. Statement of Financial Position. 3. The following are objectives of budgeting EXCEPT: Select one: A. Compare organisational actual achievement with planned goals. B. Ensuring departments within an organisation operate as a team. C. Establishing and communicating organisational goals. D. Developing appropriate high technology information system for an…arrow_forwardThe formula for Contribution is Select one: a. Fixed cost + loss b. Sales - Variable cost c. Fixed cost - Profit d. Sales + Variable costarrow_forwardWhich of the following formulas is used to calculate the contribution margin ratio?(Sales − Fixed costs) ÷ Sales.(Sales − Total costs) ÷ Sales.(Sales − Cost of goods sold) ÷ Sales.(Sales − Variable costs) ÷ Sales.arrow_forward
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