If Mazoon Company sells unit outputs below the breakeven point_ O a. total sales revenue will be less than total fixed costs O b. there will be a loss O c. there will be an decrease in total fixed costs d. total sales revenue will be less than total variable costs O e. None of the given answers

If Mazoon Company sells unit outputs below the breakeven point_ O a. total sales revenue will be less than total fixed costs O b. there will be a loss O c. there will be an decrease in total fixed costs d. total sales revenue will be less than total variable costs O e. None of the given answers

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 7P

See similar textbooks

Related questions

Q: Which of the following statements about margin of safety is false? O a. If only the fixed costs…

A: This option is False A. If only the fixed cost decreases but the number of units sold and unit…

Q: Which of the following is true if a company can accept a special order without affecting its regular…

A: The following is true if a company can accept a special order without affecting its regular sales…

Q: Which of the following statements about margin of safety is false? O a. If only the fixed costs…

A: Margin of safety is the difference between the expected sales at the given profitability and the…

Q: Before a company reaches the breakeven point Select one: a. The fixed cost is equal to zero b. The…

A: Contribution is calculated as Sales less variable costs. Sale price is the price at which the…

Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…

A: Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the…

Q: Which of the following statements about margin of safety is false? O a. If the variable cost per…

A: If Fixed cost decreases remaining constant Break even sales automatically Break even sales reduces…

Q: In the CVP analysis, at the point of breakeven O a. total contribution margin minus total fixed…

A: The break even sales units are the sales where business earns no profit no loss.

Q: Which of the following statements about margin of safety is false? O a. If only the fixed costs…

A: The Margin of Safety is the difference between the Budgeted Revenues and Breakeven Revenues.…

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…

Q: Frisco Corporation is analyzing its fixed and variable costs within its current relevant range. As…

A: The correct answer is option (3).

Q: Business Unit A, the supplying business unit, is selling to an outside market. It has excess…

A: Transfer Pricing Transfer pricing is important in the inter transfer for product transferred from…

Q: Which of the following formulas is used to calculate break-even units? Fixed Costs ÷ Unit…

A: "Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: :Holding other factors constant, a company's contribution margin per unit will increase with All…

A: The contribution margin represents the portion of sales that is left after the deduction of variable…

Q: Briefly explain the impact of each of the following scenarios on the break-even point and the margin…

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: Before a company reaches the breakeven point Select one: O a. The variable cost is decreasing O b.…

A: Break even point is the point where there is no profit and no loss.

Q: If XYZ Company sells unit outputs that exceed the breakeven point, a. there will be an increase in…

A: CVP investigation takes a goose at the impact of deals volume minor departure from prices and…

Q: If Mazoon Company sells unit outputs below the breakeven point O a. there will be a loss b. total…

A: break even point is a situation where the company will be in a stage of no profit and no loss. Every…

Q: The break-even point is that level of activity where a. total contribution margin equals the sum of…

A: At break-even point, there is no profit or no loss.

Q: g) Briefly explain the impact of each of the following scenarios on the break-even point and the…

A: Margin of Safety(Amount) : Total Revenue-Breakeven point Margin of Safety(Units) : Current Sales…

Q: At the breakeven point Select one: a. Fixed costs will be equal to variable costs b. Sales will be…

A: Sales revenue: It is the revenue earned by a business on selling the goods or providing services to…

Q: Holding other factors constant, a company's contribution margin per unit will increase with: O a.…

A: Contribution margin is referred to as that portion of sales revenue which is not absorbed by the…

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: g) Briefly explain the impact of each of the following scenarios on the break-even point and the…

A: Margin of safety: The excess of actual sales over the break-even sales is known as margin of safety.…

Q: Which of the following is true regarding the contribution margin ratio of a company that produces…

A: Contribution margin is one of the important terms under the Cost Volume Profit analysis.Contribution…

Q: Which of the following statements about margin of safety is false? If the variable cost per unit…

A: Margin of safety can be referred to as the difference between the break even sales and the expected…

Q: Which of the following is true? O Variable costs minus the fixed costs equals net income. O Total…

A: The income is calculated as excess of revenues over expenses.

Q: On the cost-volume-profit graph, which of the following would result into a decrease in the…

A: CVP analysis: This analysis helps to evaluate how the changes made in cost and volume do affect the…

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: Compared to companies that have a cost structure that is mainly comprised of fixed costs, companies…

A: Operating income shows that how revenue leads to growth in operating income. It is a tool to measure…

Q: Frisco Corporation is analyzing its fixed and variable costs within its current relevant range. As…

Q: Encircle the followings:  Which of the following is a definition of break-even point? a) The…

A: The cost-volume-profit analysis is helpful in looking at the impact of different levels of volume…

Q: On the cost-volume-profit graph, which of the following would result into an increase in the…

A: Break even point in units = Fixed costs / (Selling price per unit - Variable cost per unit

Q: NUBD Co. manufactures and sells a single product. If the selling price and variable costs both…

A: we know that, Fixed cost in total will remain the same and fixed cost per unit will change as per…

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: Holding other factors constant, a company's contribution margin per unit will increase with: O a.…

A: The contribution margin represents the portion of sales that is left after the deduction of variable…

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: When performing sales mix analysis, which one of the following is true: a. Producing and selling…

A: Sales mix is the ratio in which different products are sold in the company. Contribution margin is…

Q: At the breakeven point Select one: O a. Fixed costs will be equal contribution margin minus variable…

A: CVP analysis is done to measure the effect of change in the costs or outlays of the entity on its…

Q: On the costvolume - profit graph which of the following would result into a decrease in the…

A: Answer

Q: 1. The difference between contribution margin and income from operations is ________. net income…

A: Fixed costs = Contribution margin - Income from operations Operating leverage = Contribution margin…

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…

Q: :Holding other factors constant, a company's contribution margin per unit will increase with All…

Q: Before a company reaches the breakeven point Select one: O a. The fixed cost is equual to zero O b.…

A: Breakeven point is the benchmark for any organization where it is in the position of no profit and…

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: Which of the following occurs if a company experiences an increase in its fixed costs? Select one: O…

A: Fixed cost indicates the cost which remains constant to a certain level of activity after which the…

Q: The break-even point in CVP analysis is defined as the point 1) where output units equal input…

A: A Break-even point is a level of sales at which there is no profit or loss. Hence, at the break-even…

Q: Holding other factors constant, a company's contribution margin per unit will increase with: a. All…

A: Contribution margin per unit is the value that can be determined by reducing the variable costs from…

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 would not affect the breakeven point? O a. A change in variable cost per unit…

A: Break even point can be referred to as a sales level at which the firm is just able to recover all…

Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

100%

The answer please ?

If Mazoon Company sells unit outputs below the breakeven point_
a.
total sales revenue will be less than total fixed costs
b. there will be a loss
O c.
there will be an decrease in total fixed costs
d. total sales revenue will be less than total variable costs
e.
None of the given answers
The contribution margin ratio is 70%. If total fixed costs are $23,000, then what is the
producing and selling 66,550 units? The selling price is $3 per unit.
a.
59,895
b. 116,755
F1
F2
F3
F4
F5
F6
F7
F8
&
2
4
17
%# 3

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Break even point concept

VIEW

Step 2: Analysis and Answer

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

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

what is the Revenue, cost and profit functions for the problem below? Orange Company buys Product A for P15 per units and sells them for P25 per unit. There areno other variable costs. Fixed cost is P6,000. Use the breakeven formula to determine thefollowing:a. Revenue, cost and profit functions.
Suppose Morrison Corp.’s breakeven point is revenues of $1,100,000. Fixed costs are $660,000. Q1. Compute the contribution margin percentage. Q2. Compute the selling price if variable costs are $16 per unit. Q3. Suppose 75,000 units are sold. Compute the margin of safety in units and dollars. Q4. What does this tell you about the risk of Morrison making a loss? What are the most likely reasons for this risk to increase?
Given the following information, answer thequestions:• The ratio of variable cost per unit divided by selling price per unit equals 0.3.• Fixed costs amount to $60,000.(a) Draw the cost-volume-profit chart.(b) What is the break-even point?(c) What effect would an 8% decrease in sellingprice have on the break-even point from part (b)?
How much would be the net effect on the total segment profit if product B is dropped and discontinued? Assume that by dropping product B, product A would increase A's sales by 80%. How much would be the net effect on the total segment profit? Assume that by dropping product B, product A would decrease A's sales by 20%. Moreover, 30,000 of common costs allocated are avoidable. How much would be the net effect on the total segment profit?
Given the following, solve the independent questions using the CVP analysis. Selling Price = 30 Variable Cost per Unit = 20 Total Fixed Cost = 60,000REQUIRED: 1 Find the following functions: • Total Revenue = [TR] • Total Variable Cost = [TVC] • Total Cost = [TC] • Total Profit = [TP] 2 What is the volume of production for the business firm not to incur any profit nor loss? 3 At zero quantity of production, how much is the total cost? 4 What is the volume of production if the company wants to earn 100,000 profit?
Cesar Company has three product lines: A, B and C. The information given below is available. Assume Cesar Company drops Product C. Cesar Company then doubles the production and sales of Product B without ?increasing fixed costs. What will happen to operating income Sales Variable costs Contribution margin Avoidable fixed costs Unavoidable fixed costs Operating income(loss) Product A S100,000 76,000 24,000 9,000 6.000 $9.000 Product B $90,000 48,000 42,000 18,000 9,000 $15.000 Product C $44,000 35,000 9,000 3,000 7.700 S(1,700) increase by $18,000 O increase by ST15,000 () increase by $36,000 increase by $24,000 increase by $42,000 )
Holding other factors constant, a company's contribution margin per unit will increase with: a. any increase in variable cost per unit O b. any increase in quantity sold. Oc. any increase in the selling price per unit O d. increase in its total fixed costs O e. All answers given are NOT correct. If sales are $20,000, variable costs are $8,000, and fixed costs are $2,000, the contribution margin rati is: (rounded to the nearest number) ed O a. 10% z of O b. 50% F1 F2 F3 F4 F5 F6 F7 F8 F9 %23 2$ & 2 4 6. 7 8. Q E R T Y A S F C { V }BYNI > 1.
Before a company reaches the breakeven point Select one: a. The variable cost is decreasing Ob. The total contribution margin is negative c. The total operating income is negative Od. The contribution margin per unit is higher than the fixed costs per unit Oe. The fixxed cost is equal to zero Ne 0000 llinn
If this is the Overall break even point = Fixed cost / Contribution margin ratio = $16,650,000 / 64.74% = $25,718,257 approx And if the sales commission increases to 15%, the variable costs will increase thereby the contribution margin will decrease. This will also decrease the contribution margin ratio. When the contribution margin ratio decreases, the break-even point will increase, and when the break-even point increases the margin of safety will decrease. What happens: If Mirabel purchases the new equipment for $1,200,000, it will increase fixed costs by 10% but will decrease the variable cost per unit for all 3 models by 5%. What will Mirabel’s new break-even point be? If Mirabel invests the additional $650,000 in fixed marketing expenses, sales of the Model 301 are expected to increase by 8%. What is the break-even and margin of safety under these circumstances? If the projection is that sales will…
The manufacturer of a product that a variable cost of $2.50 per unit and total fixed cost of $125,000 wants to determine the level of output necessary to avoid losses. a. what level of sales is necessary to break, even if the product is sold for $4.25? what will be the manufacturer's profit or loss on the sales of 1000,00 units? b.If fixed costs rise to $175,000, what is the new level of sales necessary to break even? c.If variable cost decline to $2.25 per unit, what is the new level of sales necessary to break even? d. If fixed cost were to increase to $17,000, while variable cost declined to $2.25 per unit, what is the new break-even level of sales? e. If a major proportion of fixed costs were noncahs (depreciation), would failure to achieve the break-even level of sales imply that the firm cannot pay its current obligation as they come due? Suppose $100,000 of the above fixed cost $125,000 werre depreciation expense. what level of sales would be the cash break-even level of sales?…
Fixed cost = 10,000 Material cost per unit = 0.15 Labor cost per unit = 0.10 Revenue per unit = 0.65 Suppose Toys R Us sells all that it produces, profit is calculated by subtracting the fixed cost and total variable cost from total revenue. Give a mathematical model for calculating profit and implement your model from part in Excel. If Toys R Us makes 12,000 units of the new product, what is the resulting profit? [KINDLY SHOW SOLUTION SINCE I WILL TYPE IT IN EXCEL. THANK YOU SO MUCH.]
Management believes it can sell a new product for $6.50. The fixed costs of production are estimated to be $5,500, and the variable costs are $2.50 a unit. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs. Round your answers to the nearest dollar. Enter zero if necessary. Use a minus sign to enter losses, if any. Quantity Total Revenue Variable Costs Fixed Costs Total Costs Profits (Losses) 0 $ $ $ $ $ 500 $ $ $ $ $ 1,000 $ $ $ $ $ 1,500 $ $ $ $ $ 2,000 $ $ $ $ $ 2,500 $ $ $ $ $ 3,000 $ $ $ $ $ Determine the break-even level using the above table and use the Exhibit 19.5 to confirm the break-even level of output. Round your answers for the break-even level to the nearest whole number. Round your answers for the fixed costs, variable costs, total costs,…