On the cost-volume-profit graph, the area between the total cost line and the sales line before the break-even point represents The fixed cost amount a O The contribution margin per unit b O The loss area .c O The variable cost amount .d O The profit area .e O

On the cost-volume-profit graph, the area between the total cost line and the sales line before the break-even point represents The fixed cost amount a O The contribution margin per unit b O The loss area .c O The variable cost amount .d O The profit area .e O

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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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

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On the cost-volume-profit graph, the area between the total cost line and the sales line before the break-even point
represents
The fixed cost amount a O
The contribution margin per unit b O
.c O
The variable cost amount .d O
The loss area
The profit area
.e O

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Contribution margin is Oa. profit Ob. the excess of sales over variable costs Oc. Oc. another term for volume in the "cost-volume-profit" analysis Od. the same as sales revenue
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Select the correct statement concerning the below cost-volume-profit graph: Line E A O d. O e. O a. None b. At point B, profits equal total costs. O c. Line E is the total sales line. d. Line F is the Total sales line. e. The point identified by "B" is the breakeven point. The break-even point is where B Line F Oa. None O b. total sales equal total fixed costs. O c. total variable costs equal total fixed costs. total sales equal total variable costs. Line D contribution margin ratio equals total fixed costs. O a. 190 000 b. None OC. 0.73 22 The following monthly data are available for Lumberyard Company which produces only one product: Break-even level in sales of dollars: $530 000 Budgeted sales in dollars for the month of June: $720 000 d. 1 250 000 e. 1.35 How much is the margin of safety for the company for June?
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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 TRUE
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The amount of revenue required to earn a target profit is equal to Total fixed cost divided by contribution margin Total fixed cost divided by the contribution margin ratio Targeted profit divided by the contribution margin ratio Total fixed cost- plus targeted profit divided by contribution margin ratio Targeted profit divided by the variable cost ratio