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- The line that begins at the origin on a CVP graph represents total expenses. total fixed expenses. total sales revenues. both the total expenses and the total sales revenues. Which of the following best describes the concept of a "constraint?" Expected future costs that differ among alternatives. None of the items in this list of answers. A benefit foregone by choosing one alternative course over another. The distribution of all products to be sold.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 constantOn 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
- 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 OWhich one of the following is not an assumption of CVP analysis? The behavior of costs and revenues are linear within the relevant range. Sales mix remains constant. All units produced are sold. All costs are variable costs.Direction: Read carefully and answer the questions below. Encircle the letter of the correct answer. 1. Which of the following is an example of a variable cost? а. interest b. ingredients с. insurance d. lease 2. What type of cost varies depending on the quantity of products being produced? а. fixed b. net sales с. total d. variable 3. Which among the following concepts is usually seen on the top item in an income statement from which all costs and expenses is subtracted to arrive at net income? a. fixed cost b. net sales с. total cost d. variable cost 4. When do we obtain the break-even point? When the fixed cost is equal to the total cost When the total cost is equal to the variable cost When the variable cost is equal to the fixed cost d. When the number of units of goods sold covers the all the costs а. b. с. 5. Which of the following is NOT true? а. The fixed cost does not vary over time. b. The total cost is the sum of the fixed cost and the variable cost. с. The total cost is…
- Which of the following is not an assumption underlying cost-volume-profit analysis?a. The sales mix is constant.b. The break-even point will be passed during the period.c. Total sales and total costs can be represented by straight lines.d. Costs can be accurately divided into fixed and variable components.46. Revenue, cost, and profit. The price-demand equation and the cost function for the production of HDTVS are given, respectively, by x 9,000 - 30p and C(x) = 150,000 + 30x where x is the number of HDTVS that can be sold at a price of $p per TV and C(x) is the total cost (in dollars) of produc- ing x TVs.Let P(x) be the annual profit for a certain product, where x is the amount of money spent on advertising. (a) Interpret P(0) (b) Describe how the marginal profit changes as the amount of money spent on advertising increases. (c) Explain the economic significance of the inflection point.
- Below is the information on a project that you are evaluating for deciding on its worthiness as an investment. ABC company is considering a new investment whose data are shown below. WACC for the project under consideration Net investment in fixed assets (immediate) Required new working capital (immediate) Working capital from the end of the first year onwards as a Percentage of Sales Straight line deprec. Rate (every year end from the end of year 1} Sales revenues (starting at the end of year 1) Operating cost excluding depreciation, (starting at the end of year 1) 10% 75000 15000 25% 33.33% 75000 25000 Tax Rate Annual increase in Operating Costs each year from year 2 onwards Annual increase in Sales revenue from the end of the year 2 onwards Depreciation: Fixed assets to be fully depreciated in books using the straight line method over 4 years to zero Salvage value of the fixed assets at the end of the project life 35% 6% 9750?Which one of the following is not considered an assumption of cost-volume-profit analysis Costs can be divided into variable and fixed components a O Costs are linear b O Sales mix of products sold does not remain constant .cO Selling price per unit does not change with volumed O Fixed cost per unit is not constant e OWhich of the following statements about CVP analysis is true? O a. Operating income calculations in CVP analysis are based on groSs margin. O b. The CVP analysis assumes that total variable costs remain the same over a relevant range. O c. The CVP analysis assumes that variable costs per unit remain the same over a relevant range. O d. Unit selling price, unit variable costs, and unit fixed costs are known and remain constant. O e. All of the given answers are false.