Operating leverage predicts the effects of a given fixed cost on operating income when: Group of answer choices No sales discounts are allowed Sales volume changes Production volume changes Variable costs change
Q: CVP analysis relies on the assumptions that costs are either strictly fixed or strictly variable.…
A: Introduction:- Cost-volume-profit analysis is used to measures how changes in variable and fixed…
Q: What is the Breakeven formula when a profit is included: Group of answer choices c. Fixed Costs –…
A: Break-even point is the point at which there is no loss or no profit. It is because the sales…
Q: ssume there is a reduction in the selling price and all other CVP parameters remain constant. This…
A: The contribution margin is calculated as the difference between the sales and variable costs. The…
Q: Which of the following conditions would cause the break-even point to increase? Oa. total fixed…
A: The break even point the fixed cost of the production of the material is equal to the difference in…
Q: Which of the following statements is TRUE? O A. Variable costs per unit decrease as production…
A: Total Variable cost are the cost which changes with change in production volume . Fixed cost do not…
Q: If only the selling price per unit of a product increases (variable cost per unit and total fixed…
A: CVP analysis, or cost-volume-profit analysis, is a management accounting technique used to analyze…
Q: Variable costs _______ (pick all that apply) Group of answer choices 1) in total, change in direct…
A: Variable costs are the expenditure incurred on production of goods which changes in direct…
Q: Which of the following statements accurately describes the "relevant range?" a. The operation…
A: The relevant range is production range in which fixed costs remain constant. Fixed cost is a cost…
Q: Under variable costing, how is it possible to increase net operating income without increasing sales
A: Introduction:- Under the Variable costing includes only variable manufacturing costs such as direct…
Q: The conventional CVP (Cost-volume and profit) analysis has some underlying assumptions regarding…
A: Cost volume profit analysis - This analysis shows how a change in variable cost and change in fixed…
Q: If the ordering cost triples in an EOQ model, while the remaining values stay constant, how will the…
A: Economic Order Quantity is a model which aims to minimize the total inventory cost including the…
Q: Fixed costs per unit increase proportionately with increases in volume of activity within the…
A:
Q: Which of the following describes the behavior of the fixed cost per unit?
A: Fixed cost is the cost which is doesnt change gets effects with the change in production which means…
Q: Calculation of profit change from changes in sales price, sales volume, variable costs, or fixed…
A: This question deals with profit change from changes in sales price, sales volume, variable costs, or…
Q: CVP analysis
A: Option "b" is wrong because the statement is true. The purpose of CVP analysis is to study the…
Q: Show the effects oncontribution margin of changesin variable costs, fixed costs,selling price, and…
A: Cost-Volume-Profit (CVP) Analysis: It is a method followed to analyze the relationship between the…
Q: What is the effect of an increase in variable costs as a percentage of sales onthe contribution…
A: Variable cost refers to the cost which varies according to the volume of produced units. Increase in…
Q: ?Which one of the following is not considered an assumption of cost-volume-profit analysis Costs can…
A: The question is multiple choice question. The question is related to Marginal Costing and is of cost…
Q: What analysis ensures that the income for the firm will cover its variable costs? a. ratio…
A: Companies need to analyse how many products to sell or how much sales to make in a financial year to…
Q: Identify the formula that computes the degree of operating leverage (DOL).
A: The degree of operating leverage (DOL) measures how much the operating income of a company will…
Q: Which of the following statements about CVP analysis is true? O a. Unit selling price, unit variable…
A: Cost volume profit analysis is the methods to identify the impact on operating income due to the…
Q: The contribution margin per unit will increase.
A: Fixed costs are costs or expenses in the economics and business sectors that do not alter with…
Q: The cost-volume-profit (CVP) profit-planning model assumes that over the relevant range of activity:…
A: The objective of the question is to identify the correct assumption of the cost-volume-profit (CVP)…
Q: When output volume increases, do fixed costs per unit increase, decrease, or stay the same within…
A: Fixed Costs: These are the costs that remain constant in total dollar amount irrespective to the…
Q: A firm can reduce its breakeven volume by: decreasing fixed costs. B) decreasing contribution…
A: The objective of the question is to identify the correct option that can help a firm reduce its…
Q: Which of the following statements is CORRECT with respect to fixed costs per unit? Select one: A.…
A: Fixed costs are those costs which do not change with change in level of activity. For example,…
Q: Operating leverage measures the: 1. Change in profit when sales changes 2. change in contrribution…
A: Leverage is another way to refer to debt. In business, Leverage often refers to borrowing funds to…
Q: Give an example of how, under absorption costing, operating income could fall even though the unit…
A: Definition: Absorption Costing: The absorption costing is a method used to allocate the fixed…
Q: Relevant of differential cost analysis takes all variable and fixed costs into account to analyze…
A: Differential cost analysis is the difference in cost for every alternative which helps in making the…
Q: How do costs behave when there is a change in volume? a) ______ increases or decreases in total in…
A: Hi student SInce there are multiple questions, we will answer only first question. Since first…
Q: Which of the following assumptions of the CVP graph is not true? Multiple Choice Costs are linear.…
A: CVP stands forc cost volume price it is a way to find out that how changes in variable and fixed…
Q: Cost-volume-profit analysis is used for ________. analyzing the effects of changes in costs on…
A: Cost volume profit analysis is designed for profit forecasting at varying levels of sale volume and…
Q: Which of the following statements about operating leverage is NOT true? Group of answer choices…
A: The objective of the question is to identify the incorrect statement about operating leverage among…
Q: Degree of operating leverage (DOL) measures the sensitivity of OCF in response to changes of The…
A: We have formula,Degree of operating leverage(DOL) = % change in operating income/% change in sales
Q: The cost-volume-profit analysis for a breakeven chart does not assume Group of answer choices Some…
A: Contribution means the difference between the selling price and variable cost . Fixed cost remain…
Q: As volume increases, which of the following statements is NOT correct? O Variable cost per unit will…
A: In accounting we see that costs are of main two types – fixed costs and variable costs. Fixed costs…
Q: The break-even point is that level of activity where:
A:
Q: Which of the following statements is true? I. Incremental analysis is an analytical approach that…
A: In this set of statements, we will examine the accuracy of each statement in the context of…
Q: Which of the following is not a potential advantage of variable costing relative absorption costing?…
A: Cost volume profit analysis is calculated by dividing the fixed cost by the unit contribution…
Q: A. Mastery Problem: Break-Even Point in Units and the Profit-Volume Graph CVP and the Contribution…
A: Break even point is a point where a business is only covering its fixed costs and variable costs…
Q: Which of the following is true of fixed and variable costs? Volume changes will not change the…
A: Fixed cost includes expenses that remain constant irrespective of the level of outputs, like rent,…
Q: Variable costing income will be greater than absorption costing income when: a. Sales is greater…
A: If under variable costing, unit sold are less than units produced, the fixed manufacturing overhead…
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- Profitability changes may be simply calculated by using what kind of tool: sales price/volume/variable costs/fixed costs.If the percentage change in operating income resulting from a given percentagechange in sales is higher than the percentage change in sales itself, thena. an increase in the selling price would not alter the contribution marginper unit.b. variable costs per unit have increased.c. variable costs have decreased in total.d. the company has operating leverage.e. the company has no fixed costs.CLEAR MY CHOICE Which of the following statements about CVP analysis is false? O a. Operating income calculations in CVP analysis are based on contribution margin not gross margin. O b. All of the given answers are true. O c. Total revenues and total costs are linear in relation to output units. O d. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income O e. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. NEXT PAC AGE ere to search
- Variable costs and fixed costs can best be described by which of the following when production levels decrease? Total fixed costs decrease, but fixed costs per unit stay constant. Fixed costs per unit stay constant, but variable costs per unit decrease. Fixed costs per unit increase, but variable costs per unit stay constant. Total variable costs stay constant , but variable costs per unit decrease .1. The difference between contribution margin and income from operations is ________. net income variable costs fixed costs None of these choices are correct. 2. The relationship between a company’s contribution margin and income from operations is measured by _____. contribution margin operating leverage margin of safety break-even point 3. The __________ is the relative distribution of sales among the products sold by a company. sales mix mixed cost product mix None of these choices are correct. 4. The unit selling price of the overall enterprise product equals the ________. average selling price of the products price of the highest-selling product in the mix sum of the unit selling prices of each product multiplied by its sales mix percentage price of the product having the lowest selling priceBreak-even analysis assumes over the relevant range that Group of answer choices total variable costs are linear. fixed costs per unit are constant. total variable costs are nonlinear. total revenue is nonlinear.
- Which of the following costs are always incremental and relevant in decision analysis? a) Opportunity costs and sunk costs b) Avoidable costs and opportunity costs c) Only avoidable costs d) Avoidable costs and sunk costs Which of the following will increase a company's breakeven point? a) reducing its total fixed costs b) increasing the selling price per unit c) increasing variable cost per unit d) increasing contribution margin per unitWhat is happening to average costs when marginal cost is greater than average cost at a specific production level? A. Average cost is decreasing B. Average cost and marginal cost are equal C. Average cost is increasing D. Average cost is not changing AContribution 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
- Which of the followings is not correct about cost-based pricing? Select one: a. Total fixed costs change as the production amount changes. b. Total costs are the sum of total fixed and variable costs. c. Total variable costs increase due to a rise in production level. d. Variable costs per unit tend to be constant with respect to number of units produced.Which of the following statements about CVP analysis is false? O a. Operating income calculations in CVP analysis are based on contribution margin not gross margin. O b. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. Oc. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income O d. Total revenues and total costs are linear in relation to output units. O e. All of the given answers are true. LEVIOUS PAGE FINISH ATTEMPT ... Finish Esc FnLock F1 F2 F3 F4 FB F9 F10 F11 @ 23 2$ % 1 3 4 6 8. Q W E IT Y S G Y J L. C NIM 24 Alt こ0 >Which of the following statements about CVP analysis is false? O a. Operating income calculations in CVP analysis are based on contribution margin not gross margin. O b. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. O c. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income O d. Total revenues and total costs are linear in relation to output units. O e. All of the given answers are true. OUS PAGE FINISH ATTEMPT ... F1 F2 F3 F4 F5 F6 F7 F8 F10 23 % & 2 3 4 7 8. V Q W T A F K 13 C V BYNI M 24 S
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