Answered: The dollar amount of sales needed to…

The dollar amount of sales needed to achieve a target operating income is computed by dividingbtarget operating income by the contribution margin ratio True False

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter21: Variable Costing For Management analysis

Section: Chapter Questions

Problem 10E: How is the quantity factor for an increase or a decrease in the amount of sales computed in using...

See similar textbooks

Related questions

Q: a. Calculate the productivity in terms of revenue per dollar of input. (R

A: Meaning of Productivity Productivity means the production of goods with high quality and also at a…

Q: The amount of revenue required to earn a target profit is equal to Total fixed cost divided by…

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

Q: a. How can the mathematical equation for break-even sales show both sales units and sales dollars?…

Q: :All of the following represents a cost-volume-profit relationship except Total contribution margin…

A: Cost-volume-profit relationship : The Cost Volume-Profit relationship is the study of relationship…

Q: Listed below are nine technical accounting terms introduced in this chapter:Variable costs Relevant…

Q: On a CVP graph, the intersection of the sales revenue line and the total cost line is known as the:…

A: The Break-even point indicates that total units are to be sold by the business entity to recover its…

Q: To calculate the sales dollars necessary to achieved a desired profit level, the sum of fixed costs…

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

Q: Prepare an analysis of the sales quantity and unit price factors did the price decrease generate…

A: Sales quantity factor = (Actual Quantity - planned Quantity) * Planned Sales Price Sales quantity…

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: Sort the following contribution margin income statement line items in the correct order from top…

A: Operating income is calculated after deducting the variable costs and fixed costs from the total…

Q: Which of the following is NOT true regarding an income statement organized according to the…

A: An income statement is a financial statement that tracks both corporate revenue and expenses over a…

Q: Which of the following formulas is used to calculate the contribution margin ratio? (Sales − Fixed…

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: On the cost- volume -profit graph , the area between the total cost line and the sales line before…

A: Cost-volume-profit graph represents the sales line, total cost line, variable cost, fixed costs and…

Q: Compute breakeven sales. (Use the rounded contribution margin ratio calculated in the previous part…

A: Break-even point is the point at which the entity does not make any profit or loss That is Selling…

Q: Which of the following does not represent a cost-volume-profit analysis equation? O a. Sales - fixed…

A: Cost-volume-profit equation: Profit = Revenue – Fixed Costs – Variable Costs

Q: he mathematical equation for computing required sales to obtain target net income is: Required Sales…

A: Introduction:- One of the most uses of CVP analysis is the determination of the sales required to…

Q: Contribution margin ratio is the proportion of contribution in relation to the Net Income Variable…

A: SOLUTION- CONTRIBUTION MARGIN RATIO IS THE RATIO SHOWING THE CONTRIBUTION MARGIN IN TERMS OF…

Q: TRUE OR FALSE Net income under variable costing method and absorption costing method are always the…

A: If there is change in the ending inventory, net income will be different in both the methods.

Q: What is the contribution margin per unit? contribution margin ratio? Unit sales at break even…

A: Hey, since there are multiple requirements posted, we will answer the first three requirements. If…

Q: Sort the following contribution margin income statement line items in the correct order from top…

A: In a Contribution Margin Income Statement, the variable cost are reduced from sales revenue to get…

Q: Explain the difference between the economist Cost-Volume-Profit (CVP) analysis model and the…

A: The difference in in economic cost value model and accountant cost value model is:- accountant argue…

Q: What is the high-low method used to estimate? a. variable costs and production capacity b. total…

A: The high-low method is a method using which the variable cost per unit and total fixed cost is…

Q: On a traditional income statement, sales revenue less cost of goods sold equals Question 26…

A: The income statement is prepared to find net income or losses incurred during the period.

Q: ?Which of the following does not represent a cost-volume-profit analysis equation Sales + fixed…

A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…

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 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: Margin of safety ratio is computed by dividing excess of actual or budgeted sales from break- even…

A: Margin of safety ratio = Profit ratio / Contribution margin ratio

Q: Which of the following statements about CVP analysis is false? O a. Unit selling price, unit…

A: CVP analysis appearance at the impact of sales volume variations on prices and operative profit. The…

Q: Question 1 On the cost-volume-profit graph, the area between the total cost line and the sales line…

A: Cost-volume-price (CVP) analysis is a way to find out how changes in variable and fixed costs affect…

Q: . To compute the breakeven point using the contribution margin, we get the ratio of a. Total fixed…

A: Note: Since you have asked multiple questions we will solve the first question for you. If you want…

Q: If unit costs remain unchanged and sales volume and sales price per unit both increase from the…

A: Operating profit is the total income from operations before taxes. The revenue and the money spent…

Q: Which of the following does not represent a cost-volume-profit analysis equation? O a. Contribution…

A: Cost-volume profit analysis is a tool that helps in decision making by establishing a relationship…

Q: Which of the following does not represent a cost-volume-profit analysis equation? O a. Contribution…

A: Contribution = Sales - Variable expenses Profit = Contribution - fixed expenses

Q: The contribution margin ratio is equal to: total manufacturing expenses / sales. contribution margin…

A: Contribution margin: Difference between the sales and the variable costs is called contribution…

Q: Which of the following statements is true when making decisions using cost-volume-profit (CVP)…

A: The contribution margin is calculated as difference between sales and variable costs. The net income…

Q: Which of the following statements about CVP analysis is false? O a. Operating income calculations in…

A: Cost-Volume-Profit (CVP) Analysis: It is a method followed to analyze the relationship between the…

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: Which of the following is not an assumption underlying cost-volume-profit analysis?

A: Cost Volume Profit analysis- This analysis helps in understanding the cost and profit based on the…

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…

Q: Which of the following expressions can be used to calculate brcak-even sales revenue with the…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Question

The dollar amount of sales needed to achieve a target operating income is computed by dividingbtarget operating income by the contribution margin ratio

True

False

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Solution

VIEW

Step 3 Conclusion

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 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

How is the quantity factor for an increase or a decrease in the amount of sales computed in using contribution margin analysis?
The contribution margin is the a. amount by which sales exceed total fixed cost. b. difference between sales and total cost. c. difference between sales and operating income. d. difference between sales and total variable cost. e. difference between variable cost and fixed cost.
Which of the following ratios indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit? a. costs and expenses ratio b. contribution margin ratio c. margin of safety ratio d. profit ratio
compute for the following items: d. Contribution margin ratio e. Breakeven point in pesos f. Breakeven point in unit sales
What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit? A. Margin of safety ratioB. Contribution margin ratioC. Costs and expenses ratioD. Profit ratio
Which one of the following is defined, at any given sales volume, as the ratio of the total contribution margin to operating profit at that sales volume?
the dollar amount of sales needed to achieve a target operating income is computed by what
The mathematical equation for computing required sales to obtain target net income is: Required Sales Revenue = a. Total Fixed Costs + Target Net income b. Total Variable Costs + Total Fixed Cost + Target Net Income c. Total Contribution – Total Fixed Costs d. Total Variable Costs + Target Net Income
The amount of revenue required to earn a target profit is equal to Total fixed cost divided by contribution margin Total fixed cost divided by the contribution margin ratio Targeted profit divided by the contribution margin ratio Total fixed cost- plus targeted profit divided by contribution margin ratio Targeted profit divided by the variable cost ratio
Find (a) total sales revenue, (b) selling price, (c) rate of return on investment, and (d) markup percentage on full cost for this product.
In a cost-volume-profit (CVP) graph, the intersection of the total sales line and the total expense line represents which of the following? Multiple Choice The break-even point The total fixed expenses The total variable expenses The total contribution margin
To calculate the sales dollars necessary to achieved a desired profit level, the sum of fixed costs plus desired prof it is divided by contribution margin weighted average unit contribution margin contribution margin ratio unit sales price minus unit contribution margin