Calculate per-unit costs and compare to last year. Are the reduced unit costs for Product A due to scale or scope? Product A last year Product B last year Units Production Cost Marketing Cost 100 50 200 80 2.5 4 Units Production Cost Marketing Cost Product A coming year 150 150 40 Product B coming year 200 80 2 3.2 a. The reduced per unit costs for product A are due to scale b. The reduced per unit costs for product A are due to scope c. We cannot be certain whether the reduced per unit costs for product A are due to scale or scope. d. The reduced per unit costs for product A are due to both scale and scope

Calculate per-unit costs and compare to last year. Are the reduced unit costs for Product A due to scale or scope? Product A last year Product B last year Units Production Cost Marketing Cost 100 50 200 80 2.5 4 Units Production Cost Marketing Cost Product A coming year 150 150 40 Product B coming year 200 80 2 3.2 a. The reduced per unit costs for product A are due to scale b. The reduced per unit costs for product A are due to scope c. We cannot be certain whether the reduced per unit costs for product A are due to scale or scope. d. The reduced per unit costs for product A are due to both scale and scope

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Which of the following is true of fixed and variable costs? Volume changes will not change the relationship between fixed and variable costs. Fixed costs are fixed in total, but vary per unit; variable costs vary in total, but are fixed per unit. As sales increase, the contribution margin percentage increases. O The relationship between sales, variable costs, and the contribution margin does not change when the sales price per unit changes. The contribution margin is what remains after fixed costs have been subtracted from total sales.
Potter Corporation produces one product. The following per unit cost information is available: Direct materials $ 7.00 Direct labor 15.00 Variable overhead 8.00 Variable Selling and Admin. 2.00 Fixed overhead costs are $100,000 per peiod and fixed selling and administrative costs are $70,000 per period. The selling price is $70 per unit. REQUIRED: A. Prepare an absorption costing (traditional) income statement assuming: 1. Production is 8,000 units and sales are 8,000 units. 2. Production is 8,000 units and salesa are 9,000 units. 3. Production is 8,000 units and sales are 6,000 units. Unit Sales 8,000 Sales Cost of Goods Sold Gross Profit Selling and Admin Net Income 9,000 6,000
Using the conventional method I got the cost per unit for Product A: 54 GBP and Product B: 110 GBP and using the ABC principles I got the cost for Product A: 80 GBP and for Product B: 63 GBP. What are the causes for any differences in the cost based on obtained results?
Which of the following would produce no change in the contribution margin per unit? Select one: a. A 14% increase in variable cost. b.A 7% increase in selling price. CA 15% decrease in selling price. d. None of the given of answers. A 23% increase in the number of units sold.
On the CVP graph, the next unit sold will increase sales by an amount equal to the Select one: O a. Contribution margin ratio O b Selling price per unit minus the variable.costs per unit Oc Variable costs per unit Od. Difference between contribution margin and fixed costs O e. Selling price per unit
Under variable costing: a. Net operating income will always be higher than under absorption costing. b. Net operating income will tend to move up and down in response to changes in levels of production. O c.Inventory costs will be lower than under absorption costing. d. Net operating income will tend to vary inversely with production changes
Baxtell Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense $ 27 7 4 9 370,800 183,200 During the year, the company produced 30,900 units and sold 22,900 units. The selling price of the company's product is $73 per unit. Required: 1. Assume that the company uses absorption costing. a. Compute the unit product cost. Unit product cost b. Prepare an income statement for the year. (Do not leave any empty spaces; Input a O wherever it is required.) Absorption Costing Income Statement Cost of goods sold:
1. Fill in the missing numbers in the table. Use the following questions to help fill in the missing numbers in the table: a. What is the total contribution margin? b. What is the total variable expense? c. How many units were sold? d. What is the per-unit variable expense? e. What is the per-unit contribution margin? 2. Answer the following questions about breakeven analysis: a. What is the breakeven point in units? b. What is the breakeven point in sales dollars? 3. Answer the following questions about target profit analysis and safety margin: a. How many units must the company sell in order to earn a profit of $48,000? b. What is the current margin of safety in units? c. What is the margin of safety in sales dollars? d. What is the margin of safety in percentage?
Within the relevant range, as volume of activity increases a. Total fixed costs remain the sameb. Fixed cost per unit decreasesc. Variable cost per unit remains the samed.Total variable costs increasese. all of the above
Fill in the missing amounts in each of the eight case situations below. Each case Is Independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format Income statement for each case, enter the known data, and then compute the missing items.) Required: a. Assume that only one product is being sold in each of the following four case situations: Unit sold Sales Variable expenses Fixed expenses Operating income (loss) Contribution margin per unit Sales Variable expenses Fixed expenses $ Operating income (loss) Average contribution margin (percentage) Case #1 20,400 244,800 163,200 68,000 $ $ 136,000 $ 10 Case #2 $ Case #1 536,000 43,520 10.880 $ 8,800 20% 10 $ 69 Case #3 Case #2 13,600 b. Assume that more than one product is being sold in each of the following four case situations: (Enter "Contribution margin ratio" in percent. Round your final answers to the nearest whole dollar amount.) 436.000 283.400 109.000 95,200 16,320 13 $ S CA Case #4…
1. Assume that the company uses absorption costing A) compute the unit product cost B) prepare an income statement for a year(do not leave empty spaces;input a 0 whatever it is required) 2. Assume the company uses variable costing A) compute the unit product cost B) prepare an income statmement(input 0 on empty spaces)
There would be a difference between the absorption operating income and variable operating income, if: Select one: O O a. There was an increase in period costs. b. A company sold less than the number of units produced in a given period. c. A company used the contribution margin statement instead of the conventional income statement. d. There was no beginning or ending inventories.

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