Question #3The break-even point is where total sales equal total variable costs.TrueFalse1. Question #1Which of the following factors should be considered in a make-or-buy decisionA variable cost of manufacturingpurchase price if item is bought outsidefixed overhead that is directly traced to the itemall of the aboveQuestion #2How much sales are required to earn a target net income of P160,000 if total fixed costs are P200,000 and thecontribution margin ratio is 40%?A) 510,000B) 810,000900,000400,000

Break-even point is the point at which company’s revenues which are earned during the year are equal…

Answered: The break-even point is where total…

Business

Accounting

The break-even point is where total sales equal total variable costs. True B) False

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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.

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Within the relevant range: Select one: O A. variable cost per unit decreases as production decreases. O B. fixed cost per unit increases as production decreases. O C. fixed cost per unit decreases as production decreases. O D. variable cost per unit increases as production decreases.
When using CVP Analysis, Net Profit (positive NI) would occur when Fixed Costs (FC) exceed total Contribution Margin. TRUE FALSE
Define the term break-even point. What is the variable cost ratio? The contribution margin ratio? How are the two ratios related? Define the term sales mix. Give an example to support your definition.
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
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.
B) What is meant by the term margin of safety when calculating the break - even point for a product? Is this the same as the profit margin?