Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 3, Problem 15MC
If the sales mix in a multi-product environment shifts to a higher volume in low contribution margin products, the break-even point will ____________________________________ .
A. remain unchanged because all products are included in the calculation of break-even
B. increase because the low contribution margin products have little effect on break-even
C. increase because the per composite unit contribution margin will decrease
D. decrease because the per composite unit contribution margin will increase
Expert Solution & Answer
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When performing sales mix analysis, which one of the following is true:
O a. Producing and selling more units of the product with a higher contribution margin would likely
decrease the breakeven point
O b. Normally the calculation of the breakeven point for multiproduct is much simpler than that for
a single product.
O c. The sales mix is usually assumed to change.
O d. Making changes to the sales mix will likely cause no change in the breakeven point
O e. Shifting the sales mix to the product with a lower contribution margin will likely increase the
overall contribution margin
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When sales price increases and all other variables are held constant, the break-even point will ________.A. remain unchangedB. increaseC. decreaseD. produce a lower contribution margin
When performing sales mix analysis, which one of the
:following is true
.a
.The sales mix is usually assumed to change
.b
Producing and selling more units of the product with
a higher contribution margin would likely decrease
the breakeven point
.C
Making changes to the sales mix will likely cause no
change in the breakeven point
.d
Normally the calculation of the breakeven point for
multiproduct is much simpler than that for a single
product
.e
Shifting the sales mix to the product with a lower
contribution margin will likely increase the overall
contribution margin
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Chapter 3 Solutions
Principles of Accounting Volume 2
Ch. 3 - The amount of a units sales price that helps to...Ch. 3 - A companys product sells for $150 and has variable...Ch. 3 - A companys product sells for $150 and has variable...Ch. 3 - A companys contribution margin per unit is $25. It...Ch. 3 - A company sells its products for $80 per unit and...Ch. 3 - If a company has fixed costs of $6.000 per month...Ch. 3 - Company A wants to earn $5,000 profit in the month...Ch. 3 - A company has wants to earn an income of $60,000...Ch. 3 - A company has pre-tax or operating income of...Ch. 3 - When sales price increases and all other variables...
Ch. 3 - When sales price decreases and all other variables...Ch. 3 - When variable costs increase and all other...Ch. 3 - When fixed costs decrease and all other variables...Ch. 3 - When fixed costs increase and all other variables...Ch. 3 - If the sales mix in a multi-product environment...Ch. 3 - Break-even for a multiple product firm. can be...Ch. 3 - Waskowski Company sells three products (A. B. and...Ch. 3 - Beaucheau Farms sells three products (E, F, and G)...Ch. 3 - A company sells two products, Model 101 and Model...Ch. 3 - Wallace Industries has total contribution margin...Ch. 3 - Macom Manufacturing has total contribution margin...Ch. 3 - If a firm has a contribution margin of $59,690 and...Ch. 3 - If a firm has a contribution margin of $78M90 and...Ch. 3 - Define and explain contribution margin on a per...Ch. 3 - Define and explain contribution margin ratio.Ch. 3 - Explain how a contribution margin income statement...Ch. 3 - In a cost-volume-profit analysis, explain what...Ch. 3 - What is meant by a products contribution margin...Ch. 3 - Explain how a manager can use CVP analysis to make...Ch. 3 - After conducting a CVP analysis, most businesses...Ch. 3 - Explain how for is possible for costs to change...Ch. 3 - Explain what a sales mix is and how changes in the...Ch. 3 - Explain how break-even analysis for a...Ch. 3 - Explain margin of safety and why it is an...Ch. 3 - Define operating leverage and explain its...Ch. 3 - Calculate the per-unit contribution margin of a...Ch. 3 - Calculate the per-unit contribution margin of a...Ch. 3 - A product has a sales price of $150 and a per-unit...Ch. 3 - A product has a sales price of $250 and a per-unit...Ch. 3 - Maple Enterprises sells a single product with a...Ch. 3 - Marlin Motors sells a single product with a...Ch. 3 - Flanders Manufacturing is considering purchasing a...Ch. 3 - Marchete Company produces a single product. They...Ch. 3 - Brahma Industries sells vinyl replacement windows...Ch. 3 - Salvador Manufacturing builds and sells...Ch. 3 - Salvador Manufacturing builds and sells...Ch. 3 - Use the information from the previous exercises...Ch. 3 - Company A has current sales of $10,000,000 and a...Ch. 3 - Marshall s target margin of safety be in units and...Ch. 3 - Calculate the per-unit contribution margin of a...Ch. 3 - Calculate the per-unit contribution margin of a...Ch. 3 - A product has a sales price of $175 and a per-unit...Ch. 3 - A product has a sales price of $90 and a per-unit...Ch. 3 - Cadre, Inc., sells a single product with a selling...Ch. 3 - Kerr Manufacturing sells a single product with a...Ch. 3 - Delta Co. sells a product for $150 per unit. The...Ch. 3 - Shonda & Shonda is a company that does land...Ch. 3 - Baghdad Company produces a single product. They...Ch. 3 - Keleher Industries manufactures pet doors and...Ch. 3 - Manufacturing builds and sells switch harnesses...Ch. 3 - Manufacturing builds and sells switch harnesses...Ch. 3 - Use the information from the previous exercises...Ch. 3 - Company A has current sales of $4,000,000 and a...Ch. 3 - Best Wholesale recently calculated their...Ch. 3 - A company sells small motors as a component part...Ch. 3 - A company manufactures and sells racing bicycles...Ch. 3 - Fill in the missing amounts for the four...Ch. 3 - Markham Farms reports the following contribution...Ch. 3 - Kylies Cookies is considering the purchase of a...Ch. 3 - Morris Industries manufactures and sells three...Ch. 3 - Manatoah Manufacturing produces 3 models of window...Ch. 3 - Jakarta Company is a service firm with current...Ch. 3 - A company sells mulch by the cubic yard. Grade A...Ch. 3 - A company manufactures and sells blades that are...Ch. 3 - Fill in the missing amounts for the four...Ch. 3 - West Island distributes a single product. The...Ch. 3 - Wellington, Inc., reports the following...Ch. 3 - Karens Quilts is considering the purchase of a new...Ch. 3 - Abilene Industries manufactures and sells three...Ch. 3 - Tim-Buck-Il rents jet skis at a beach resort....Ch. 3 - Fire Company is a service firm with current...Ch. 3 - Mariana Manufacturing and Bellow Brothers compete...Ch. 3 - Roald is the sales manager for a small regional...Ch. 3 - As a manager, you have to choose between two...Ch. 3 - Coutures Creations is considering offering Joe, an...
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- When performing sales mix analysis, which one of the following is false: O a. Producing and selling more units of the product with a higher contribution margin would likely decrease the breakeven point O b. Shifting the sales mix to the product with a lower contribution margin will likely ncrease the overall contribution margin O c. Making changes to the sales mix will likely cause a change in the breakeven point O d. Normally the calculation of the breakeven point for multiproduct is more complicated than that for a single product. O e. The sales mix is usually assumed to be remain the same.arrow_forward:When performing sales mix analysis, which one of the following is true Shifting the sales mix to the product with a lower contribution margin will likely increase the overall .a O contribution margin Normally the calculation of the breakeven point for multiproduct is much simpler than that for a single b O product Making changes to the sales mix will likely cause no change in the breakeven point .c O Producing and selling more units of the product with a higher contribution margin would likely decrease .d O the breakeven point The sales mix is usually assumed to change .e Oarrow_forwardWhich of the following statements is true? I. Incremental analysis is an analytical approach that focuses only on those revenues and costs that will not change as a result of a decision. II. When expressed on a per unit basis, fixed costs can mislead decision makers into thinking of them as variable costs. II. To estimate what the profit will be at various levels of sales volume, multiply the number of units to be sold above or below the break-even point by the unit contribution margin. Statements I and III are true. Statements II and III are true. All of the statements are true. None of the statements are true.arrow_forward
- Which of the following would lead to the breakeven point of a product shifting to the left on a traditional breakeven chart? A An increase in the selling price per unit B An increase in the variable costs of each unit C An increase in the level of fixed costs D A decrease in the selling price per unitarrow_forwardWhich of the following would not affect the breakeven point? Oa. A change in variable cost per unit Ob. A change in sales price per unit O C.A change in total fixed cost O d. A change in number of units soldarrow_forwardIf the proportions of different products in a sales mix change, Contribution margin per unit decreases 1.True 2.Falsearrow_forward
- The effect on contribution margin ratio (CMR) and BEP of increasing sales price assuming it will not decrease unit sales would be: a. CMR - Increase; BEP - Decrease b. CMR - Decrease; BEP - Decrease c. CMR - Increase; BEP - No effect d. CMR - Decrease; BEP - No effectarrow_forwardIf Mazoon Company sells unit outputs that exceed the breakeven point there will be a profit .a O total sales revenue will exceed total variable costs b O None of the given answers .c O there will be an increase in total fixed costs .d O total sales revenue will exceed total fixed costs .e Oarrow_forwardIf XYZ Company sells unit outputs that exceed the breakeven point, a. there will be an increase in total fixed costs b. total sales revenue will exceed total variable costs total sales revenue will exceed total fixed costs dthere will be a profit e None of the given answersarrow_forward
- On the costvolume - profit graph which of the following would result into a decrease in the breakeven point (Assuming other factors remain unchanged )? a. Decrease in number of units sold b.Decrease in selling price per unit c. Increase in fixed costs d. Decrease in variable cost per unit e. None of the given answersarrow_forwardWhich one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs are linear b. Sales mix of products sold does not change c. Selling price per unit changes with volume d. Costs can be divided into variable and fixed components e. Fixed cost per unit is not constantarrow_forwardOn the cost-volume-profit graph, which of the following would result into an increase in the breakeven point (Assuming other factors remain unchanged)? O a. None of the given answers O b. Increase in number of units sold O c. Decrease in variable cost per unit O d. Decrease in selling price per unit Oe. Decrease in fixed costsarrow_forward
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