10. Brasher Company manufactures and sells a single product that has a positivecontribution margin. If both the selling price and variable cost decrease by 10% andfixed expenses do not change, then what would be the effect on the contributionmargin per unit and the contribution margin ratio?Contribution margin Contribution marginper unitratioA.DecreaseDecreaseB.DecreaseNo changeC.No changeDecreaseD.No changeNo change

Contribution margin means the difference between sales and the variable expenses. Contribution…

Answered: 10. Brasher Company manufactures and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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6..
If the percentage change in operating income resulting from a given percentagechange in sales is higher than the percentage change in sales itself, thena. an increase in the selling price would not alter the contribution marginper unit.b. variable costs per unit have increased.c. variable costs have decreased in total.d. the company has operating leverage.e. the company has no fixed costs.
15. If the total contribution margin increases and fixed costs do not change, then net income can be expected to a. decrease by an equal amount. b. increase by an amount equal to the increase in contribution margin times the CM ratio. c. increase by an equal amount. d. none of these.
NUBD Co. manufactures and sells a single product. If the selling price and variable costs both decrease by 5% and fixed costs do not change, then the unit contribution margin will decrease and the contribution margin ratio will decrease the unit contribution margin will decrease and the contribution margn ratio will remain the same the unit contribution margin will remain unchanged and contribution margin ratio will decrease neither the unit contribution margin nor the contribution margin ratio will change
:Holding other factors constant, a company's contribution margin per unit will increase with All answers given are NOT correct .a O any increase in variable cost per unit .b O .any increase in quantity sold .c O any increase in the selling price per unit .d O increase in its total fixed costs .e O
Before a company reaches the breakeven point Select one: O-a. The fixed cost 1s egual to zero O b. Total fixed costs are increasing Oc The total contribution margin is lower than totalfixed costs O d. The total contribution margin is negative Oe The contribution margin per unit is higher than the fixed costs per unit
3. The result of the fixed expenses divided by the unit contribution margin refers to the: * Margin of safety Contribution margin ratio Break-even point in unit sales Break-even point in dollar sales None of the above 4. Which of the following statements is correct concerning the variable expenses per unit within the relevant range? * The variable expenses per unit remain constant as the activity changes The variable expenses per unit increase as the activity increases The variable expenses per unit decrease as the activity increases The variable expenses per unit can O increase or decrease as the activity changes
Each of a company's two product lines has a different contribution margin ratio . If the company's total sales remain the same but the sales mix shifts toward selling more of the product with the higher contribution ratio , which of the following is true ? O a Fixed cost will be constant . . the breakeven point will decrease . Ocall of the answers are true . d the average contribution margin ratio will increase . O e operating income will increase
When the sales price per unit decreases, the contribution margin per unit A. decreases B. increases OC. increases proportionately OD. remains the same 13
How do you calculate the break-even point in sales? Contribution margin fixed costs Fixed costs total sales Profit variable costs Fixed costs contribution margin % 0,000

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