Comparison between incremental revenues and incremental costs is the decision base for: a. Outsourcing decision b. Discontinuation decision c. Insourcing decision d. Special orders when there is idle production capacity
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A: A break-even point means where contribution margin of a company is equal to its Fixed Cost.
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A: Cost: It refers to the economic value incurred by the company for producing a product or service.
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A: Introduction: Incremental cost : Its an extra cost for producing the unit.
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A: Opportunity costs : The benefit foregone by the company by employing the resource in other…
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A: SOLUTION FIXED COST INCLUDES THE RENT OR MORTGAGE PAYMENT YOU PAY FOR YOUR FACTORY AND OFFICE…
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Q: Which of the following statements is true regarding a company's segment margin? It is primarily used…
A: Solution: The true statement regarding a company's segment margin is that "It is primarily used to…
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A: This question deals with profit change from changes in sales price, sales volume, variable costs, or…
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Q: Which of the following statements is true for a firm that uses variable costing? A. The cost of a…
A: Variable costing may be a strategy that as it were allocates variable costs to stock. This approach…
Q: TRUE OR FALSE Net income under variable costing is unaffected by changes in production levels.
A: in variable costing fixed manufacturing overhead are exclude from the cost of production
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A: Since you have asked questions with multiple sub-parts, we shall be answering thefirst 3 for you.…
Q: In making a short-term special decision, which of the following is MOST important? a. Use a…
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Q: Which of the following is FALSE regarding Variable Costing? O A. Net income will only change if the…
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A: Format of Income Statement under Absorption Costing
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Q: Business Unit A, the supplying business unit, is selling to an outside market. It has excess…
A: Transfer price refers to the price which is used by the related parties to charge one another. For…
Q: Give an example of how, under absorption costing, operating income could fall even though the unit…
A: Definition: Absorption Costing: The absorption costing is a method used to allocate the fixed…
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A: Differential cost analysis is the difference in cost for every alternative which helps in making the…
Q: Which one of the following statements is correct? O a. Avariable cost is a cost whose cost per unit…
A: The cost can be classified into two categories i.e fixed cost and variable cost. The FIxed cost…
Q: 2. CVP analysis allows management to determine the relative profitability of a product by * Keeping…
A: CVP Analysis is one of the cost volume profitability analysis which shows changes in profits level…
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A: Fixed cost means the cost which do not vary with the level of output where as variable cost will…
Q: When using a variable costing system, the contribution margin discloses the excess of Revenues over…
A: Contribution margin = Total revenue - Total variable cost
Q: Marginal costing is a technique that distinguishes between variable costs and fixed costs. In this…
A: Cost-volume-profit (CVP) analysis is an important and systematic method that provides useful…
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A: Cost volume profit analysis is calculated by dividing the fixed cost by the unit contribution…
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A: Break even point is a point where a business is only covering its fixed costs and variable costs…
Q: TRUE OR FALSE Net income under variable costing is closely tied to changes in sales levels.
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Q: Which of the following best describes a fixed cost? A. It may only change in total when such…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: Profitability changes may be simply calculated by using what kind of tool: sales…
A: The net profits are calculated as difference between sales and total expenses.
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A: Under variable costing, the inventory cost is valuate on the basis of variable manufacturing cost…
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A: Variable cost is that cost that varies with the number of units produced. It means that increase in…
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A: The opportunity cost are relevant cost by the manager to reduce the transfer price to meet a price…
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.…
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A: Absorption costing: It refers to the method of product costing in which the price of the product is…
Q: What's the expected profit at break-even in a cost-volume-profit analysis
A: Introduction : The cost volume profit analysis examines the relationship between the variable and…
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- Discuss how financial data prepared on the basis of variable costing can assist management in the development of short-run pricing policies.The contribution margin approach helps managers in short-term decision making because it A. reports costs and revenues at present value B. reports only mixed costs C. treats fixed manufacturing overhead as product costs D. isolates costs by behaviorRelevant Cost for non-routine decision making: Sell or Process Further How much is the incremental profit/loss for product A, B, C
- Fixed costs depend on the: Select one: a. amount of resources acquired b. amount of resources used c. volume of sales d. volume of production Which of the following types of information are used in management accounting? Select one: a. financial information b. information focused on the long term c. nonfinancial information d. All of these answers are correct The production component of the value chain refers detailed planning, engineering, and testing of products and processes. Select one: True False The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is: Select one: a. conversion costing b. cost assignment c. cost tracing d. cost accumulation. Period costs: Select one: a. are treated as expenses in the period they are incurred b. are directly traceable to products c. are also referred to as manufacturing overhead costs d. include direct labor Period costs: Select one: a. are treated as expenses in the period they are incurred b.…Solve operating income using variable costing.The cost driver for demand creation activity is: a. Value of materials stored b. Number of orders c. Increase in sales d. Value of stock
- 1. Activity based costing is likely a more advantageous costing methold versus traditonal costing, to facilliate which of the following type of analysis? a) analysis of service organization cost b) analysis of channel profitablity c) analysis of long term profitablity d) analysis for reduction selling price of all products? 2. A ___ is any factor that causes a change in the cost of an activity. a) activity based cost b) cost pool c) cost driver d) standard 3. Which of the following is no a basic cost category for indirect cost? a) inventory financing cost b) Volume related cost c) Product batch cost d) activity based costAbsorption costing is:A. a good way to value inventories for the balance sheet.B. used for external reporting purposes.C. less useful than variable costing for management decision making. D. A and B is correct E. A, B and C is correctMarginal Costing is a technique of _____. a. Cost Reduction b. Cost Evaluation c. Cost Control d. Cost Measurement
- In Classification Of Cost (Marginal costs) What Is A Business Situational Example of the ff: Marginal costs Differential/Incremental costs Opportunity costs Relevant cost Replacement cost Shutdown cost Capacity cost Sunk costContribution Margin, Cost-Volume-Profit Analysis and Break-Even Point (Overview) Fixed, Variable and Mixed Costs An appreciation of cost behavior is needed in order for management to understand and predict profitability as the costs of material, labor and other operating expenses and levels of production and sales change. It's important to review the cost behavior of fixed, variable and mixed costs before contribution margins, cost-volume-profit analysis, and break-even points. 1. In the table below, Have-A-Seat Inc. has outlined many of the costs associated with producing office chairs. With respect to the production and sale of office chairs, classify each cost as fixed, mixed, or variable. a. Pressure-molded plastic for chair frames b. Pension cost: $0.50 per employee hour on the job c. Insurance premiums for inventory: $2,100 per month plus $0.01 for each dollar of inventory over $2 million d. Property taxes: $120,000 per year for the factory building and…Knowing how costs behave to change in the level of activity is useful to management for all the following reasons except for: predicting customer demand. predicting profits as sales and production volumes change. estimating costs. changing an existing product production.
