Before a company reaches the breakeven point Select one: O a. The fixed cost is equual to zero O b. Total fixed costs are increasing Oc The total contribution margin is lower than total fixed costs O d. The total contribution margin is negative. Oe. The contribution margin per unit is higher than the fixed costs per unit

Before a company reaches the breakeven point Select one: O a. The fixed cost is equual to zero O b. Total fixed costs are increasing Oc The total contribution margin is lower than total fixed costs O d. The total contribution margin is negative. Oe. The contribution margin per unit is higher than the fixed costs per unit

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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A firm can reduce its breakeven volume by: decreasing fixed costs. B) decreasing contribution margin. Jy C increasing variable costs. lowering selling price.
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Assume that the firm whose cost structure is depicted in the figure expects to produce a loss for the upcoming period. The loss would be shown on the graph: by the area diagonally to the right of the break-even point. in some other area not mentioned above. by the area immediately above the break-even point. by the area immediately below the total cost line. by the area diagonally to the left of the break-even point.
:Total Fixed costs the level of activity none of the given is correct .a increases with .b does not change at all with .c decreases with .d does not change within a relevant range
1. If only the selling price per unit of a product increases (variable cost per unit and total fixed costs do not change), Using Break Even Analysis, provide a unique mathematical example to support the break even point decreasing
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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.
Which of the following is true when referring to fixed costs? I. Fixed costs remain constant in total throughout the relevant range. II. The trend in companies today is toward greater fixed costs relative to variable costs. III. As volume increases, unit fixed cost and total fixed cost will change. IV. Fixed costs increase in total throughout the relevant range. a. II only b. All but IV c. I and II d. All but III e. None of these
Which of the following costs are always incremental and relevant in decision analysis? a) Opportunity costs and sunk costs b) Avoidable costs and opportunity costs c) Only avoidable costs d) Avoidable costs and sunk costs Which of the following will increase a company's breakeven point? a) reducing its total fixed costs b) increasing the selling price per unit c) increasing variable cost per unit d) increasing contribution margin per unit
: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
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