Select the correct statement regarding break-even point analysis.Multiple ChoiceThe break-even point in sales dollars equals total fixed costs divided by contribution margin per unit.An increase in fixed costs causes the break-even point to increase.An increase in contribution margin per unit causes the break-even point in units to increase.A decrease in the variable cost per unit causes the break-even point in units to increase.X

The break-even point is that level of the unit where the company neither incurs any gain nor any…

Select the correct statement regarding break-even point analysis. Multiple Choice O O The break-even point in sales dollars equals total fixed costs divided by contribution margin per unit. An increase fixed costs causes the break-even point to increase. An increase contribution margin per unit causes the break-even point in units to increase. A decrease in the variable cost per unit causes the break-even point in units to increase.

Select the correct statement regarding break-even point analysis. Multiple Choice O O The break-even point in sales dollars equals total fixed costs divided by contribution margin per unit. An increase fixed costs causes the break-even point to increase. An increase contribution margin per unit causes the break-even point in units to increase. A decrease in the variable cost per unit causes the break-even point in units to increase.

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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Which of the following is true of fixed and variable costs? Volume changes will not change the relationship between fixed and variable costs. Fixed costs are fixed in total, but vary per unit; variable costs vary in total, but are fixed per unit. As sales increase, the contribution margin percentage increases. O The relationship between sales, variable costs, and the contribution margin does not change when the sales price per unit changes. The contribution margin is what remains after fixed costs have been subtracted from total sales.
1. If only the selling price per unit of a product increases (variable cost per unit and total fixed costs do not change), Using Break Even Analysis, provide a unique mathematical example to support the break even point decreasing
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
1. Fill in the missing numbers in the table. Use the following questions to help fill in the missing numbers in the table: a. What is the total contribution margin? b. What is the total variable expense? c. How many units were sold? d. What is the per-unit variable expense? e. What is the per-unit contribution margin? 2. Answer the following questions about breakeven analysis: a. What is the breakeven point in units? b. What is the breakeven point in sales dollars? 3. Answer the following questions about target profit analysis and safety margin: a. How many units must the company sell in order to earn a profit of $48,000? b. What is the current margin of safety in units? c. What is the margin of safety in sales dollars? d. What is the margin of safety in percentage?
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 .
Within the relevant range, as volume of activity increases a. Total fixed costs remain the sameb. Fixed cost per unit decreasesc. Variable cost per unit remains the samed.Total variable costs increasese. all of the above
Break-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.
If sales volume increases and all other factors remain constant, then the: O contribution margin ratio will increase. O margin of safety will increase. break-even point will decrease. O net operating income will decrease.
3. The result of the fixed expenses divided by the unit contribution margin refers to the: * Margin of safety Contribution margin ratio Break-even point in unit sales Break-even point in dollar sales None of the above 4. Which of the following statements is correct concerning the variable expenses per unit within the relevant range? * The variable expenses per unit remain constant as the activity changes The variable expenses per unit increase as the activity increases The variable expenses per unit decrease as the activity increases The variable expenses per unit can O increase or decrease as the activity changes
As the level of activity increases, how will a mixed cost in total and per unit behave? A) B) (C) D) E) In Total Increase Increase Increase Decrease Decrease Multiple Choice Choice A Choice B Choice C Choice D Per Unit Decrease Increase No effect Increase No effect
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
Each of a company's two product lines has a different contribution margin ratio . If the company's total sales remain the same but the sales mix shifts toward selling more of the product with the higher contribution ratio , which of the following is true ? O a Fixed cost will be constant . . the breakeven point will decrease . Ocall of the answers are true . d the average contribution margin ratio will increase . O e operating income will increase