Cost-volume-profit analysis assumes what_a) Variable costs change with volumeb) Fixed costs change with volumec) Selling price varies with volumed) Mix of products changes_?

The problem pertains to Cost-Volume-Profit Analysis. Cost-Volume-Profit (CVP) analysis helps…

Answered: Cost-volume-profit analysis assumes…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 10E

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Profitability changes may be simply calculated by using what kind of tool: sales price/volume/variable costs/fixed costs.
Which tool can be used to easily calculate the change in profit resulting from a change in sales price, sales volume, variable costs, or fixed costs?
Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs are linear b. Sales mix of products sold does not change c. Selling price per unit changes with volume d. Costs can be divided into variable and fixed components e. Fixed cost per unit is not constant
Contribution margin is a.the same as sales revenue b.the excess of sales over variable costs c.another term for volume in the "cost-volume-profit" analysis d.profit
On a cost-volume-profit graph, when the Total Cost line is higher than the Total Revenue line, the difference represents Select one: O A. a positive return on the investment O B. a net loss O C. net income O D. not enough information is presented
The difference between sales and marginal cost is______________ a. Fixed Cost b. Profit c. Sales price d. Contribution
Target costing calculates cost as
A Cost-Volume-Profit graph contains an "Area of Loss" and an "Area ofProfitability". Which of the following best explains the difference between thetwo points on the graph? A. The area of loss represents the difference between Sales and Variable Cost.B. The area of loss begins with the concept that fixed costs have to be recovered priorto sales contributing to profit.C. The area of profit represents the difference between Sales and Variable Cost.D. The area of profit begins with the concept that no company would have any level ofsales below the break-even point.
Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Selling price per unit does not change with volume b. Costs can be divided into variable and fixed components C. Fixed cost per unit is not constant d. Sales mix of products sold does not change O e. Costs are nonlinear
What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit? A. Margin of safety ratioB. Contribution margin ratioC. Costs and expenses ratioD. Profit ratio
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Cost-volume-profit analysis assumes what_ a) Variable costs change with volume b) Fixed costs change with volume c) Selling price varies with volume d) Mix of products changes _?