Q: What information is conveyed by a cost-volume-profit graph in addition to a company’s break-even…
A: Cost-volume-profit graph (CVP): Cost-volume-profit graph is a graphical representation of volume…
Q: The High- low method is used for? A. Profit planning B. Splitting mixed cost into fixed cost and…
A: A mixed cost contains a fixed portion of cost incurred even when the facility is idle, and a…
Q: When Total Contribution magrin equals total fixed costs, this indicates operating income True…
A: If the contribution margin is equal to the total fixed cost that means it a situation of the…
Q: Contrast the income statement effect of LIFO versus FIFO(on Cost of Goods Sold and Gross Profit)…
A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…
Q: Which of the following does not represent a cost-volume-profit analysis equation? a. Contribution…
A: Your choice is incorrect because option b. Is represent a cost volume profit analysis equation. The…
Q: Gross profit is disclosed on an income statement prepared using O a) Variable costing. O b)…
A: Gross profit is disclosed on an income statement prepared using Direct Costing method.... Option C…
Q: The most important use of the CVP graph is to show a. The CM ratio at various levels of sales…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: when total contribution margin equals total fixed cost this indicates operating income true false
A: First we understand contribution margin Contribution margin means Variable cost deduct from Sales…
Q: Which of the following statements is true? Multiple Choice Product costs and variable costs are…
A: Product cost means the cost which are incurred to create a product that is intended for sale to the…
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…
Q: Calculation of profit change from changes in sales price, sales volume, variable costs, or fixed…
A: This question deals with profit change from changes in sales price, sales volume, variable costs, or…
Q: Which of the following is not a correct definition of the breakeven point? A.the point where total…
A: At Breakeven Point, Total Profits are equal to zero, Contribution Margin equal to Total Fixed…
Q: A graphic depiction of the break-even point is known as a cost-volume-profit (CVP) chart whereby the…
A: The representation of break even point in graphical form is said to be cost volume profit analysis.
Q: Profit volume ratio is used for the calculation of: Select one: O a. Profit at given sales O b.…
A: The profit volume ratio is also known as contribution margin ratio.
Q: P/V Ratio is an indicator of [A] the rate at which goods are sold [B] the volume of sales [C] the…
A: P/V ratio also known as profit volume ratio is a ratio that determines the amount of profit attained…
Q: What analysis ensures that the income for the firm will cover its variable costs? a. ratio…
A: Companies need to analyse how many products to sell or how much sales to make in a financial year to…
Q: Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs…
A: Cost volume profit analysis is also known as CVP analysis. It shows how profits of the organisation…
Q: PROFITABILITY Solution and answer Interpretation Gross profit margin Operating profit margin Net…
A: Solution:- 1)Calculation of Gross profit margin as follows under:- Formula as follows under:-…
Q: The three most common cost behavior classifications are a. variable costs, product costs, and sunk…
A: Cost volume profit analysis includes various techniques that help in the decision-making of the…
Q: Calculate the profitability ratio which includes gross profit margin, operating profit margin, net…
A: Profitability Ratio: It measures the ability of company to generate profit from its operations or…
Q: Cost-volume-profit analysis (CVP Analysis) requires management to classify all costs as either…
A: Cost volume profit analysis (CVP Analysis) helps the business entity in determining the impact on…
Q: 1. What is the controllable margin of each product? 2. What is the segment margin ofeach product? 3.…
A: The income statement can be prepared in many ways according to the determination of the net income.…
Q: In the cost-volume-profit graph,a. the break-even point is found where the total revenue curve…
A: A graphical representation of the relationship between production costs and total sales is shown by…
Q: Which of the following statements is true? OA. When a large proportion of income is spent on a…
A: To find: which of the following statement is true
Q: What type of cost is included in economic costs, but not included in accounting costs?a. Explicit…
A: Economic costs are the costs in which consideration is given to opportunity costs as well.
Q: Which is the true statement? The CVP income statement shows contribution margin instead of gross…
A: The CVP Income Statement or the Cost- Volume- Profit Income Statement is almost similar to the…
Q: Which of the following does not represent a cost-volume-profit analysis equation? Profit…
A: Cost-Volume profit Analysis:- It is a method of cost accounting which look for the impact of cost…
Q: A profit-volume graph differs from a cost-volume-profits graph in that a profit-volume graph…
A: "Since you have asked multiple questions, we will solve first question for you. If you want any…
Q: Which of these is not an objective of Cost Accounting? O a. Ascertainment of Cost O b. Cost Control…
A: Cost accounting means where every cost of doing business is recorded in necessary account and cost…
Q: Which of the following statement is CORRECT about the foundational assumption used in CVP analysis.…
A: CVP analysis means the cost-volume profit analysis. This analysis in cost management is done to have…
Q: Which of the following is the indicator of the rate at which company is earning profit? Select one:…
A: Ratio Analysis Each items in the financial statements of an enterprise is compared by using ratio…
Q: Cost-Volume-Profit graph contains an "Area of Loss" and an "Area of Profitability". Which of the…
A: Meaning of Cost Volume-profit graph Cost Volume profit graph is also shortly called as CVP graph. It…
Q: 1. Prepare an income statement using the a. Net realizable value method b. Reversal cost method
A: Net realizable value refers to the value which is realized upon the sale of assets minus cost…
Q: In a profit diagram, the safety margin can either be expressed in kronor or some form of volume.…
A: Margin of safety is a financial metric which represents the number of units beyond the break-even…
Q: profit margin ratio
A: Profit margin ratio = Net income * 100/Net sales
Q: Profits -to-Sales relationships are defined as profit margins. Select one: a. True b. False
A: Ratio analysis is referred as the quantitative method of understanding company’s liquidity,…
Q: Which of the following is NOT considered in cost-volume-profit analysis?
A: Answer: opportunity costs.
Q: A company can use cost-volume-profit analysis to determine the level of sales required to earn a…
A: CVP Analysis Equation Profit = Revenue – Fixed Costs – Variable Costs
Q: To maximize profits, firms produce the level of output that: O a. equates total revenue and total…
A: The output levels achieve highest efficiency and peak profits when marginal revenue is on par or…
Q: How does targeted profit enter into the break-even units equation?
A: Every organisation desires to attain certain target profit. Therefore the organisation makes an…
Q: et cost = Selling price - ______________. a. Cost b. Profit margin c. Revenue d. Expenses
A: Solution: Target cost = Selling price - profit margin. This is because target cost is the estimated…
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: The variable cost ratio represents The proportion of variable costs in relation to net income The…
A: Solution : The variable cost ratio represents Correct answer is Option 3 . The proportion of…
Q: A component of operating efficiency and profitability, calculated by expressing net profit as a…
A: Profit is the amount earned by an entity after deducting all the outlays from the revenues.
Q: When applying lower of cost or net realizable value under the FIFO, average cost, or specific…
A: The lower of cost or net realizable value method says we should record the inventory at market price…
Q: Gross profit variance analysis can be used to study the effect of: a. Changes in cost of goods…
A: Gross profit is the gross income/revenue left after deducting the cost of goods sold from the net…
Q: On the Cost-Volume-Profit chart graph, the area below the Total Costs Line and above the Total…
A: The cost volume analysis is used to find break even sales or desired Revenues to earn desired…
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- On 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 presentedWhich method results in a more realistic amount for income because it matches the most current costs against revenue? a.FIFO b.Weighted average cost c.Specific identification d.LIFOExplain the meaning of (A) differential revenue, (B) differential cost, and (C) differential profit (loss).
- 1. A profit-volume graph differs from a cost-volume-profits graph in that a profit-volume graph displays onlya. costs associated with units produced.b. operating income associated with expected sales.c. revenues and costs associated with sales volume.d. revenues expected at targeted sales levels.e. All of these are correct. 2. Fixed expenses that cannot be directly traced to individual segments are calleda. cost structure.b. direct fixed expenses.c. operating leverage.d. common fixed expenses.e. indifference point. 3. If sales remain the same and the margin of safety increases, which of the following is true?a. The break-even point has decreased.b. The common fixed costs have increased.c. The break-even point has remained constant.d. Variable costs have increased. 4. Match the type of income statement to the costs it includes.a. Variable costing income statementb. Absorption costing income statementc. Both types of income statements 1. Direct materials for units sold2.…Which format of the Income Statement is appropriate for financial reporting? O Variable costing O Activity-based O Absorption O any format is fine for financial reportingThe three most common cost behavior classifications are a. variable costs, product costs, and sunk costs b. variable costs, period costs, and differential costs c. variable costs, sunk costs, and opportunity costs d. fixed costs, variable costs, and mixed costs The contribution margin ratio is a. the portion of equity contributed by the stockholders b. the same as profit c. the same as the profit-volume ratio d. the same as the variable cost ratio
- In current cost financial statements: a. General price level gains or losses are recognized b. Amounts are always statement in common purchasing power c. All items are different from what they would be in a historical cost statement of financial position. d. Holding gains are recognizedProfits -to-Sales relationships are defined as profit margins. Select one:a. Trueb. FalseWhat information is needed to measure the absolute profitability of a segment? a a
- What type of cost is included in economic costs, but not included in accounting costs?a. Explicit costsb. Negative costsc. Normal profitd. Marginal coste. Unit costs1.-Joint cost can be allocated using physical- measure-based data such as weights or volume. II.- Joint cost can be allocated using using market-based data such as revenues Both statements are false Both statements are true O Only statement II is true ) Only statement I is trueWhen applying lower of cost or net realizable value under the FIFO, average cost, or specific identification method, market value a.is defined as the selling price. b.should not exceed the net realizable value plus an allowance for a normal profit margin. c.should not exceed the net realizable value less an allowance for a normal profit margin. d.is defined as the net realizable value.
