D O Spend Analysis Question 3 Which statement is FALSE: O Price analysis is used for strategic buy O Life cycle cost of ownership is used with critical buy 4 O Spend analysis is based on three main categories of spending costs O Price analysis uses an external benchmark to compare prices Question 4 Cost breakdown problem: indicator 2 30% increase in labor costs and demands a 20% increase in purchasing

D O Spend Analysis Question 3 Which statement is FALSE: O Price analysis is used for strategic buy O Life cycle cost of ownership is used with critical buy 4 O Spend analysis is based on three main categories of spending costs O Price analysis uses an external benchmark to compare prices Question 4 Cost breakdown problem: indicator 2 30% increase in labor costs and demands a 20% increase in purchasing

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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The cost-volume-profit analysis for a breakeven chart does not assume Group of answer choices Some costs vary inversely with volume. Production will equal sales. Costs are linear and continuous over the relevant range. Price will remain fixed.
Chapter 3- CVP Cost-volume-profit (CVP) analysis requires an understanding of cost behavior: variable and fixed costs. Cost behavior differs from the GAAP-based financial reporting focus: product and period costs. The two ways to categorize costs results in TWo different income statements: Absorption costing income statement: S-C-GM-SA-NI (Key assumption: Split costs into product and period costs) Variable costing income statement: S-VE-CM-FE-NI (Key assumption: Split costs into variable and fixed) 1. 2. Absorption Costing Income Statement Variable Costing Income Statement Sales $500,000 Sales $500,000 Less: Variable expenses Less: Cost of goods sold: Variable (DM+DL+VOH) Fixed (FOH) Gross margin 100,000 Product costs 100,000 60,000 S&A costs 110,000 340,000 Contribution margin 290,000 Less: Fixed expenses Less: Selling & administrative Variable 110,000 Product costs 60,000 Fixed 140,000 S&A costs 140,000 Taxable income $90,000 Taxable income $90,000 LINK THE LINEAR COST FUNCTION TO…
A. Mastery Problem: Break-Even Point in Units and the Profit-Volume Graph CVP and the Contribution Margin Income Statement For planning and control purposes, managers have a powerful tool known as cost-volume-profit (CVP) analysis. CVP shows how revenues, expenses, and profits behave as volume changes. In CVP analysis, costs are classified according to behavior: variable or fixed. To arrive at operating income in CVP analysis, costs are classified by behavior on the income statement. This format is known as the contribution margin income statement. Complete the following table to illustrate the format. Select a or b to pick the correct decscription under the sales column Contribution Margin Income Statement Sales $ XXX (a. Less: Variable Cost or b. Less: Fixed costs) (XXX) (a. Contribution margin or b. Gross margin) $ XXX (a. Less: Variable Cost or b. Less: Fixed costs) (XXX) Operating income $ XXX B. CVP and the Break-Even Point Review the following concepts about…
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If a company chooses a price to charge for its product by adding up all the expenses necessary to make the product and then adding in a profit, this is known as: a) Target Costing Ob) Skimming Pricing Oc) Cost-Based Pricing Od) Odd-Even Pricing Oe) Penetration Pricing
QUESTION 6 You have information about 4 different companies below in the table. The variable and fixed costs are expressed as the percentage of revenue based on the current sales. The companies are otherwise very similar. Which of these companies is probably have the highest degree of operating leverage? A B с D Variable cost (%) 35% 27% 50% 80% 50% 60% 30% 5% Fixed cost O Project A O Project D O Project C O Project B
sde • The most likely strategy to reduce the break-even point should be to 1. Increase fixed costs 2. Decrease selling price 3. Increase variable costs 4. Increase selling price O 1 O 2 O 3 O 4 Question 20 • In break-even analysis, which of the following is not an assumption over the relevant range 1. Unit selling price are constant 2. Unit variable costs are constant 3. Total costs are constant 4. Total fixed costs are constant O 1 O 2 O 3 04 MacBook Pro
Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed Net income (loss) Continue LA $ Eliminate LA Net Income Increase (Decrease)
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