39. (2 Suppose variable expenses were to decrease by $3.00 per unit. What effect would this have on the cost volume profit analysis? ) The unit contribution margin would ise by $3.00 The break-even point in units would increase. The break-even point in units would decrease. The unit contribution margin would rise by $3.00 AND the break-even point in units would decrease.

39. (2 Suppose variable expenses were to decrease by $3.00 per unit. What effect would this have on the cost volume profit analysis? ) The unit contribution margin would ise by $3.00 The break-even point in units would increase. The break-even point in units would decrease. The unit contribution margin would rise by $3.00 AND the break-even point in units would decrease.

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter20: Variable Costing For Management Analysis

Section: Chapter Questions

Problem 20.10EX

See similar textbooks

Similar questions

1. The formula used to calculate the number of units needed in order to earn a target income is a. (Fixed costs + variable costs) / Sales b. (Fixed costs + target income) / Sales c. (Fixed costs + target income) / CM per unit d. (Fixed costs + variable costs) / CM per unit 2. The indifference point is reached when * a. The savings in variable cost is equal to the increase in fixed costs. b. The savings in variable cost is less than the increase in fixed costs. c. The savings in fixed cost is equal to the decrease in variable cost. d. The savings in fixed cost is more than the increase in variable costs.' 3. Which of the following is not an assumption used to prepare a cost-volume-profit graph? * a. Constant sales mix b. Constant cost fluctuations c. Units produced equal units sold d. Liner costs within the relevant range
Given that the total cost, C, is related to sales volume, x, by the equation y=1000+0.2x, say true or false for the following and proof it. (a) The cost-sales line rises $2 for each increase of $10 in sales volume. (b) The slope of the line is interpreted as variable cost
Given the following information. answer the questions:• The ratio of variable cost per unit divided by selling price per unit equals 0.25• Fixed costs amount to $50.000(a) Draw the cost-volume-profit diagram(b) What is the break-even point?(c) What effect would a 6% decrease in selling price have on the break-eventhe point from the part (b)?
What is the effect in contribution margin ratio if both selling price andvariable costs are increased by 10% and the fixed costs remain the same?1. Increase by 10%2. Increase by 5%3. Decrease4. Remains the same what is the best answer? another answer for this.
6. Once the break-even point is reached, which of the following statements is true? A) Variable expenses will remain constant in total. The contribution margin ratio begins to decrease. Operating income will increase by the unit contribution margin for each additional B) C) item sold. D) The total contribution margin changes from negative to positive. 7. The break-even in units sold will decrease if there is an increase in which of the following? A) Total fixed expenses. B) Selling price. C) Unit sales volume. D) Unit variable expenses. 8. Which of the following is normally included in product cost under the variable costing method? A) Prime cost and all conversion cost. B) Direct materials cost, direct labour cost, but not manufacturing overhead cost. Direct materials cost, direct labour cost, and variable manufacturing overhead cost. C) D) Prime cost but not conversion cost. 9. Regarding job-order costing and process costing: A) Job-order costing is better in the long run B) Are both…
2. Given the following information: The ratio of variable cost per unit divided by selling price per unit equals 0.25 Fixed Costs Amount to $50,000 a. What is the Break-even point b. What effect would a 6% decrease in selling price have on the break even point from part a?
4. When the contribution margin per unit increases assuming all other factors remain constant. The effect would be An increase in sales price A decrease in fixed cost An increase in break-even point in units A decrease in break-even point in units O O O
What is the effect in contribution margin ratio if both selling price andvariable costs are increased by 10% and the fixed costs remain the same?1. Increase by 10%2. Increase by 5%3. Decrease4. Remains the same what is the best answer? another answer for this question
Ay 3. Suppose the cost and the demand for a daily product is: C=10 d(p) = D(1 - w(p)) = 200-10p What is the total contribution (profit) based on the optimal price?
a.Explain why contribution margin per unit becomes profit per unit above the break-even point b. If the contribution margin per unit is $7 and the break-even point is 10,000 units, how much profit will a firm make if 15,000 units are sold? c.What is the variable cost ratio? The contribution margin ratio? How are the two ratios related?
The breakeven point increases if : a the variable cost per unit decreases O b . the contribution margin per unit increase O c . the total fixed costs decrease O d none of the given answers O e . the selling price per unit decreases
Cost, revenue, and profit are in dollars and x is the number of units. If the total profit function is P(x) = 3x – 18, find the marginal profit MP. MP = What does this mean? O This is the total cost. O The next unit sold costs this much to make. O This is the total revenue. O The next unit sold earns this much profit. O This is the total profit.