Contribution margin is sales less Star
Q: Variable cost varies _____ with output. a. Disproportionately b. Proportionately c. More than…
A: The different costs of production are classified as fixed costs and variable costs. The fixed cost…
Q: Contribution margin per unit is the amount by which a products unit selling price exceeds its…
A: Contribution margin:- Contribution margin Indicates how much money is left after variable costs are…
Q: The major categories or captions that would appear on an income statement prepared in the variable…
A: Variable costing: Under this method, all cost is divided into two parts. The first part is a…
Q: What is the difference between absorption costing and variable costing? 2. Distinguish between…
A: Cost accounting: It is a part of managerial accounting and is used to record total cost of…
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Q: Which of the following is not a true statement about variable costs? O a. Total cost is known to…
A: Variable Cost Variable cost which is described as the cost which are incurred to the business entity…
Q: Which of the following statements is TRUE? O A. Variable costs per unit decrease as production…
A: Total Variable cost are the cost which changes with change in production volume . Fixed cost do not…
Q: Total _____ costs remain unchanged when activity changes. Fixed cost Variable cost…
A: Cost: It refers to the aggregated amount that is spent on manufacturing a product.
Q: All of the following represents a cost-volume- profit relationship except: a. Total contribution…
A: Cost profit volume analysis relationship shows how the profit of a entity changes due to change in…
Q: On an income statement prepared using variable costing, to calculate contribution margin, a company…
A: The objective of the question is to understand what costs are subtracted from sales to calculate the…
Q: when total contribution margin equals total fixed cost this indicates operating income true false
A: First we understand contribution margin Contribution margin means Variable cost deduct from Sales…
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A: Variable costing uses Contribution Margin Income Statement by showing Sales – VARIABLE expenses =…
Q: Direct materials and direct labour costs are examples of: a. Variable costs of production b. Fixed…
A: The cost of production is generally classified into two broad categories which are fixed costs and…
Q: 7. Which of the following is an example of a mixed cost? a) Direct labor cost b) Rent expense c) Raw…
A: Mixed cost is a cost combination of variable and fixed costs. Mixed cost accounting fixed cost and…
Q: Selling and administrative expenses are considered to be: a. A period cost under variable costing b.…
A: Selling expenses means the expense incurred while selling the goods like sale men commission , sale…
Q: Within the relevant range, A B D variable cost per unit increases as production decreases variable…
A: VARIABLE COST Variable cost are costs that changes as the Volume Changes. Variable Cost is…
Q: The contribution margin ratio equals: Multiple Choice O Sales contribution margin. Sales variable…
A: The contribution margin takes into consideration variable expenses only.Contribution margin is the…
Q: The total contribution margin is equivalent to the combined net profit and fixed costs. It can be…
A: Solution: The total contribution margin is equivalent to the combined net profit and fixed costs =…
Q: Which of the following does not represent a cost-volume-profit analysis equation? O a. Sales - fixed…
A: Cost-volume-profit equation: Profit = Revenue – Fixed Costs – Variable Costs
Q: Explain the effect of a decrease in the level of activity (cost driver) on: (i) total fixed cost…
A: Lets understand the basics. Fixed cost are cost which do not change with level of output. In other…
Q: Contribution margin is a function of both the selling price of a product, the variable costs of the…
A: Contribution margin Selling price - variable cost of the product. Therefore any change in either of…
Q: Under the contribution income statement, a company's contribution margin will be higher if? A…
A: Contribution is the excess of the sales revenue generated during the year over the variable cost…
Q: Variable costs per unit are affected by an increase or decrease in activity. True or False True…
A: Variable Cost is that type of cost which is associated with the number of units produced or volume…
Q: A traditional income statement focuses on distinguishing product costs and period costs, while a…
A: The income statement is prepared to record the revenues and expenses of the current period and…
Q: Under variable costing system only those costs of production that vary (variable) with production…
A: Variable costing is also called marginal costing. Under variable costing all variable cost that is…
Q: The difference between sales price per unit and variable cost per unit is the: Multiple Choice…
A: The objective of the question is to identify the term that represents the difference between the…
Q: East Coast West Coast Sales V Variable cost of goods sold v Manufacturing margin v Variable selling…
A: Contribution means sales minus varibale cost and when we divide contribution with sale , we get…
Q: Which condition would cause absorption-costing net income to be greater than variable-costing net…
A: Costing refer to the type of accounting which is used for assessing the total cost to be incurred in…
Q: Cost that remains unchanged in total within a relevant range of operations yet decreases per unit of…
A: Fixed Cost and Variable Cost - Fixed Cost are the cost which remain unchanged to the certain level…
Q: Using the given data…find the answers for Formulas 1-10. Sales Variable manufacturing cost Fixed…
A: Sales = Selling price per unit * number of sold units = 30*80000 = $24,00,000 Variable manufacturing…
Q: In CVP Analysis, total costs are defined as costs derived from product costs and period costs. TRUE…
A: Cost-volume-profit analysis is used to determine how the company's profit has been affected due to…
Q: . Which of the following is the best definition of a variable cost? A. A variable cost is one which…
A: Variable costs are the costs that vary on the basis of the level of output. They are determined per…
Q: Contribution margin is it Sales less cost of goods sold or Sales less all variable and fixed…
A: First of all: Sales less Cost of goods sold will give us the gross profit earned from sales. Sales…
Q: When units manufactured exceed units sold, variable costing income Oa. is less than absorption…
A: In variable Costing Fixed manufacturing OH treated as period cost and Deduct with all fixed cost…
Q: True or False Product cost under Variable costing are DM, DL and VOH only. Under absorption…
A: Solution:- Discussions of above statements as follows under:-
Q: Contribution margin per unit is the amount by which a product's unit selling price exceeds its…
A: Selling price: Selling price is a price set by the supplier at which he is ready to sell his goods.…
Contribution margin is sales less Star
a. fixed manufacturing
b. variable cost of goods sold, and variable selling and administrative expenses.
c. variable selling and administrative expenses, and fixed selling and administrative expenses.
d. variable cost of goods sold.
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- How do costs behave when there is a change in volume?a) ______ increases or decreases in total in direct proportion to increases or decreases in sales volume. b) ______ remains the same in total, regardless of change in sales. c) ______ have both a variable and fixed component. d) Answer the following regarding the high-low method:i) What is the formula for determining the variable costs when using the high low method:ii) Given the following information for the high and low levels, what is the variable cost per unit and the total fixed costs? iii) Based on the information in part ii), what is the relevant range?In MyAccountingLab, complete Try It! 21-1 and S21-1 through S21-3.LO2. What is contribution margin, and how is it used to compute operating income?a) What is the contribution margin if net sales revenue is $100,000 and variable costs are $40,000? b) Based on the information in part a), what is the contribution margin ratio?In MyAccountingLab, complete Try It! 21-2 and S21-4 and…2..When using the high-low method to estimate costs, the formula “Change in Cost divided by Change in Units” (or “Change in Total Cost divided by Change in Activity Level”) is used to estimate the: Fixed cost per unit Mixed cost per unit Profit per unit Indirect cost per unit Variable cost per unit Differential cost per unit Opportunity cost per unit
- Under variable costing, all fixed manufacturing costs are treated as a a. product cost included in the cost of goods manufactured. b. product cost included in the cost of ending inventory. c. period expense deducted from manufacturing margin. d. period expense deducted from contribution margin.On a cost-volume-profit graph, the revenue line will be shown below the total expense line for any activity level above the break-even point. FALSE O TRUEThe break-even point is that level of activity where: Select one: O a. sales revenue eguals fixed cost. O b. variable cost equals fixed cost. Oc total contribution margin equals the sum of variable cost plus fixed cost. O d. sales revenue equals total variable.cost Oe. contribution margin equals fixed cost.
- 1. To compute the breakeven point using the contribution margin, we get the ratio of a. Total fixed expenses and Total contribution margin b. Total variable expenses and Total Contribution margin c. Total fixed expenses and Contribution margin per unit d. Total variable expenses and Contribution margin per unit 2. A mathematical expression that describes a breakeven point of a company is a. Sales Revenue = Variable expenses + Fixed expenses b. Sales Revenue = Variable expenses - Fixed expenses c. Sales Revenue < Variable expenses + Fixed expenses d. Sales Revenue > Variable expenses - Fixed expenses 3. The Cost-Volume-Profit equation is given by a. Sales Revenue = Profits + Contribution margin ratio + Fixed expenses b. Sales Revenue = Profits + Contribution margin + Fixed expenses c. Sales Revenue = Profits+ Variable expenses + Fixed expenses d. Sales Revenue = Profits -Variable expenses…What is the key difference between Absorption and Variable Costing? A Full Costing treats Manufacturing Overhead as a period cost B Variable Costing treats Fixed Manufacturing Overhead as a period cost C Absorption Costing only considers variable costs to calculate net income D Variable Costing only considers variable costs to calculate net incomeTRUE OR FALSE Net income under variable costing is closely tied to changes in sales levels.
- Variable costing income will be greater than absorption costing income when: a. Sales is greater than production. b. contribution pricing is applied c. Production is less than or equal to sales. d. Production is greater than salesThe _________ is considered part of the cost of the product in absorption costing, but not in variable costing. Group of answer choices Variable Overhead Fixed Overhead Variable Selling & Administrative Fixed Selling and Administrative In the absorption income statement, Sales less Cost of Goods Sold is the calculation for: Group of answer choices Contribution margin Gross margin Net Income Operating IncomeWhat is happening to average costs when marginal cost is greater than average cost at a specific production level? A. Average cost is decreasing B. Average cost and marginal cost are equal C. Average cost is increasing D. Average cost is not changing A