Break-even analysis is concerned with determining a point at which the company can minimize total cost and maximize total revenue. At that point, the company makes the highest profit. Select one: O True O False
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A: Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the…
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A: A break-even point is a point or number of units at which all the revenues generated by the company…
Q: At the break-even point, sales and costs are exactly equal. However, the goal of most companies is…
A: If a company makes $ 5 off of each unit it sells and has a target operating income of $ 5,000, then…
Q: Break-even analysis is of limited use to management because a company cannot survive by just…
A: Breakeven analysis involves comparison of fixed cost, variable cost and sales price to derive the…
Q: If a company had a pure fixed cost structure, every dollar of revenue after covering the fixed costs…
A: Step 1 In the pure fixed cost structure, the variable cost does not exist; only fixed cost hit the…
Q: When deciding whether to sell as is or process a product further, managers should ignore which of…
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Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…
A: The contribution margin decides which product gives more profits to the company. The contribution is…
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A: Lets understand the basics. Fixed cost is a cost which is fixed over a period of time. It includes…
Q: Would an increase in variable costs per unit cause a company’s break-even point to increase or…
A: Variable cost is an amount that changes in total in proportion to the volume produced and sold…
Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…
A: The costs when are covered with certain amount of revenue earned, such amount is treated as break…
Q: 1: When using absorption costing, a company may be able to show a profit even if it is operating…
A: Solution: True, When using absorption costing, a company may be able to show a profit even if it is…
Q: company's total sales remain same but the sales mix shifts toward selling more of the product with…
A: Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the…
Q: Briefly explain the impact of each of the following scenarios on the break-even point and the margin…
A:
Q: In a multi-product company, as the mix of the products being sold changes, the overall contribution…
A: Overall contribution margin is the mix of individual contribution margin with the weights of their…
Q: ) Briefly explain the impact of each of the following scenarios on the break-even point and the…
A: Break even point is the point of sales where business earns no profit no loss.
Q: Is my explanation correct? When the shit in sales toward the lower contribution margin. In the…
A: Dear student your explanation is correct. In the sales mix, if the shift in sales to a product that…
Q: Which of the following occurs if a company experiences a decrease in its fixed costs? Select one: O…
A: Contribution margin = Selling price - variable cost Break even point = Fixed cost / Contribution…
Q: Which of the following statements is true? A In linear break-even analysis, the contribution margin…
A: As per the linear break-even model, the contribution margin per unit is the difference between the…
Q: In all respects, Company A and Company B are identical except that Company A’s costs are mostly…
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Q: Which of the following is true regarding the contribution margin ratio of a company that produces…
A: Contribution margin ratio =Contribution per unitSales price per unit Contribution per unit = Sales…
Q: When deciding whether to sell as is or process a product further, managers should ignore which of…
A:
Q: true or false The smaller the contribution margin ratio, the larger the amount of sales required to…
A: Contribution margin ratio: The contribution margin represents the incremental cash generated for…
Q: In the CVP analysis, Which of the following statements about the breakeven point is true? a.…
A: Cost volume profit analysis is useful to find out the different sales volume on the basis of…
Q: Which of the following is the indicator of the rate at which company is earning profit? Select one:…
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A: Meaning of Cost Volume-profit graph Cost Volume profit graph is also shortly called as CVP graph. It…
Q: Holding other factors constant, a company's contribution margin per unit will increase with: a. All…
A: Contribution margin per unit is the amount remaining with the entity on selling each unit of product…
Q: Which one of the following statement is not correct? O Both fixed and variable costs influence…
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Q: The break-even point in a given situation would be decreased by an increase in a. the CM ratio. b.…
A: CVP analysis is considered a decision-making tool that helps management to make strategies and take…
Q: 1. The amount of increase or decrease in revenue that is expected from a particular course of action…
A: Differential costing is a technique where differential costs are considered relevant. Differential…
Q: A company's break-even point will not be changed by:
A: Break-even point i Break-even point is a level of activity where no profit is gained and no loss…
Q: Which of the following occurs if a company experiences an increase in its fixed costs? Select one: O…
A: Formula: Break even point = Fixed cost / Contribution margin. Contribution margin means deduction of…
Q: Which of the following occurs if a company experiences a decrease in its fixed costs? Select one: a.…
A: Break-even point: In the accounting term break-even point is a condition where the income or profit…
Q: Which of the following statements about operating leverage is false? O a. All of the given answers…
A: Degree of operating leverage means the division of contribution with net income. It means that how…
Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…
A: "Since you have asked multiple question we will solve the first question for you. If you want any…
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A: Operating leverage: It is a cost account accounting method or technique used by the firm to measure…
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A: Introduction:- Variable costing varies in respective of units production Which is used for making…
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A: Fixed costs are fixed in nature, it doesn't vary with the change in units. The total fixed cost will…
Q: In a cost-volume-profit analysis, explain what happens at the break-even point and why companies do…
A: Break-even point: It is that point in the business when all its costs have been recovered.…
Q: Compared to companies that have a cost structure that is mainly comprised of variable costs,…
A: Ans. Mostly companies incur two types of cost - Variable cost or fixed cost. Variable cost changes…
Q: the product with the higher contribution ratio , which of the following is true ? O a Fixed cost…
A: Below option is true:- d. the average contribution margin ratio will increase
Q: Which of the following is not an assumption of break-even analysis? a. A company is operating within…
A: Break-Even Point: It is the point of sales at which entity neither earns a profit nor suffers a…
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- In a profit diagram, the safety margin can either be expressed in kronor or some form of volume. choose an alternative True FalseOn a CVP graph for a profitable company, the total expense line will be steeper than the total revenue line. True or False True FalseOn a cost-volume-profit graph, when the Total Cost line is higher than the Total Revenue line, the difference represents Select one: O A. a positive return on the investment O B. a net loss O C. net income O D. not enough information is presented
- On a CVP graph for a profitable company, the total revenue (sales) line will be steeper than the line representing total costs (variable costs and fixed costs). red O False iwer TrueOn a CVP graph for a profitable company, the total revenue (sales) line will be steeper than the line representing total costs (variable costs and fixed costs). False TrueThe line that begins at the origin on a CVP graph represents total expenses. total fixed expenses. total sales revenues. both the total expenses and the total sales revenues. Which of the following best describes the concept of a "constraint?" Expected future costs that differ among alternatives. None of the items in this list of answers. A benefit foregone by choosing one alternative course over another. The distribution of all products to be sold.
- Which of the following statements is true? OA. When a large proportion of income is spent on a product or service, the more elastic the supply will be. Percentage change in price OB Elasticity of supply Percentage change in quantity supplied OC. Products or services in which inputs are readily available have a more elastic supply. OD. None of the above is true. hand written otherwise skipFor 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.Mastery Problem: Target Income and Margin of Safety Target Income and Margin of Safety At the break-even point, sales and costs are exactly equal. However, the goal of most companies is to make a profit. When a company decides that it wants to earn more than the break-even point of income, it must define the amount it thinks it will realistically make. By modifying the break-even equation, the sales required to earn a target or desired amount of profit may be computed. Complete the following: If a company makes $5 off of each unit it sells and has a target operating income of $5,000, then it must sell units. Similarly, if a company has a target operating income of $75,000 and knows that total expenses for the period will be $75,000, how much revenue must it earn to reach its target operating income? $ Units sold or revenue earned above and beyond the break-even point contributes to the margin of safety for a company. Margin of safety is a crude measure of risk, in that it serves as the…
- Which of the following is the indicator of the rate at which company is earning profit? Select one: a. Margin of safety b. All options are correct c. Contribution margin d. Profit volume ratioOn a profit graph which of the following is not true? A.Total revenue will always be $0 at zero sales volume B.The total cost line is steeper than the total revenue line C.The total cost line will always be equal to or above the total fixed costs D.Profits is the area above the break-even point between the total cost and total revenue linesP Flag question Break-even analysis is concerned with determining a point at which the company can minimize total cost and maximize total revenue. At that point, the company makes the highest profit. Select one: True False Previous page Next page