If an organization wants to make a profit, it must generate more sales revenue than the total costs it incurs. This relationcan be expressed using which of the following profit equations?O a. Operating income = [(Sales price per unit - Variable cost per unit) x #units sold] - Fixed costO b. Operating income = [Sales price per unit - Fixed cost per unit) x # units produced] -Variable costOc Operating income Sales revenue - Total variable costs - Discretionary costsO d. Operating income - Sales revenue - Committed costs - Fixed costs

The net income is calculated as the difference between the revenue and expenses. The expenses…

Answered: If an organization wants to make a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Calculate the Break-Even Sales Amount and Sales Amount of Company X with the attached P&L (Profit & Loss) table? -Analyze and interpret X Business Sales Price (Unit) Total Sales Quantity (units) Total Sales Amount (s*unit prc.) Variable Cost (units) Total Variable Cost (b.x) Contribution Margin Total Fixed Costs P/L (Profit/Loss) Profit Margin Contribution Margin (s-b) Contribution Margin Ratio (s-b) / s 100TL / Brm. 20.000,00 2.000.000,00 75,00 1.500.000,00 500.000,00 150.000,00 350.000,00 ? 25,00 25,00% Breakeven Point (Sales Unit) (a/KP) ? Breakeven Point (Sales Amount ?
Contribution margin dividedt by Income is the: Multiple Choice Contribution margin ratio. Margin of safety. Degree of operating leverage. Sales mix. Break-even point in units.
Which of the following statements is true? I. Incremental analysis is an analytical approach that focuses only on those revenues and costs that will not change as a result of a decision. II. When expressed on a per unit basis, fixed costs can mislead decision makers into thinking of them as variable costs. II. To estimate what the profit will be at various levels of sales volume, multiply the number of units to be sold above or below the break-even point by the unit contribution margin. Statements I and III are true. Statements II and III are true. All of the statements are true. None of the statements are true.
What can the weighted average contribution margin ratio be used for? Multiple Choice To solve for a measure, at any level of sales volume, of the sensitivity of operating profit to changes in volume. Breakeven and profit planning for sales volume expressed in dollars (Y) rather than units (Q). To calculate an average per-unit contribution margin based on an assumed sales mix. To figure out the relative proportion in which a company’s products (or services) are sold. To determine the extent of fixed costs in an organization’s cost structure.
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
On the cost-volume-profit graph, which of the following would result into an increase in the breakeven point (Assuming other factors remain unchanged)? O a. None of the given answers O b. Increase in number of units sold O c. Decrease in variable cost per unit O d. Decrease in selling price per unit Oe. Decrease in fixed costs
26..
Please explain this statement thoroughly. "To estimate what the profit will be at various levels of activity, multiply the number of units to be sold above or below the break-even point by the unit contribution margin."
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)
What are the answers for the following? Construct a cost-volume-profit chart on your own paper. What is the break-even sales? What is the expected margin of safety in dollars and as a percentage of sales? Determine the operating leverage. Round to one decimal place.
Holding other factors constant, a company's contribution margin per unit will increase with: a. All answers given are NOT correct. O b. any increase in quantity sold. С. any increase in variable cost per unit O d. any decrease in the selling price per unit e. increase in its total fixed costs
Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs can be divided into variable and fixed components O b. Costs are nonlinear Fixed cost per unit is not constant О с. O d. Sales mix of products sold does not change e. Selling price per unit does not change with volume O O 0 O O

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS