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breakeven chart i

breakeven chart i

FINANCIAL ACCOUNTING
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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c. relationship among revenues, variable costs, fixed costs at different levels 3. The most important information derived from a breakeven chart is s. a. amount of sales needed to cover the variable cost b. amount of sales needed to cover the fixed cost c. relationship among revenues, variable costs, fixed costs at different l activity. d. volume or output level at which the enterprise breaks even 4. Companies with a high degree of operating leverage a. will have a more significant shift in income as sales volume changes b. have fewer fixed costs' c. have low contribution margin ratios d. are less dependent on volume to add profits 5.A company's break-even point would be increased bu a. an increase in fixed costs b. a decrease in contribution margin ratio c. a decrease in selling price d. a decrease in variable cost per unit
Transcribed Image Text:c. relationship among revenues, variable costs, fixed costs at different levels 3. The most important information derived from a breakeven chart is s. a. amount of sales needed to cover the variable cost b. amount of sales needed to cover the fixed cost c. relationship among revenues, variable costs, fixed costs at different l activity. d. volume or output level at which the enterprise breaks even 4. Companies with a high degree of operating leverage a. will have a more significant shift in income as sales volume changes b. have fewer fixed costs' c. have low contribution margin ratios d. are less dependent on volume to add profits 5.A company's break-even point would be increased bu a. an increase in fixed costs b. a decrease in contribution margin ratio c. a decrease in selling price d. a decrease in variable cost per unit
6. If the variable cost per unit decreases while selling price decreases, the new variable cost ratio in relation to the old variable cost ratio will be a. higher b. lower c. the same d. not enough information provided 7. CVP analysis is a simple but powerful tool to assist management at different stages of the decision making process, Which of the following does not represent a primary of the CVP model> a. Ability to compute the break even point b. Ability to find target sales volume c. Aids in evaluating tax planning alternatives d. Aids in determining optimal pricing policies 8. A decrease in the margin of safety would be caused by a.an increase in total fixed cost b.in increase in total actual sales c.a decrease in variable cost per unit d.a decrease in the selling price per unit 8. If the fixed cost for a product decrease and the variable cost (as a percentage of peso sales) decrease, what will be the effect on the contribution margin ratio and the break-even point respectively Contribution margin ratio Break-even point Increased a. Deceased b. Increased Decreased Decreased Decreased с. d. Increased Increased 10. If the sales mix shifts toward the higher contribution margin products, what would happen to the break-even point a. decreases b. increases c. remains constant d. requires additional information
Transcribed Image Text:6. If the variable cost per unit decreases while selling price decreases, the new variable cost ratio in relation to the old variable cost ratio will be a. higher b. lower c. the same d. not enough information provided 7. CVP analysis is a simple but powerful tool to assist management at different stages of the decision making process, Which of the following does not represent a primary of the CVP model> a. Ability to compute the break even point b. Ability to find target sales volume c. Aids in evaluating tax planning alternatives d. Aids in determining optimal pricing policies 8. A decrease in the margin of safety would be caused by a.an increase in total fixed cost b.in increase in total actual sales c.a decrease in variable cost per unit d.a decrease in the selling price per unit 8. If the fixed cost for a product decrease and the variable cost (as a percentage of peso sales) decrease, what will be the effect on the contribution margin ratio and the break-even point respectively Contribution margin ratio Break-even point Increased a. Deceased b. Increased Decreased Decreased Decreased с. d. Increased Increased 10. If the sales mix shifts toward the higher contribution margin products, what would happen to the break-even point a. decreases b. increases c. remains constant d. requires additional information
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