The equation which reflects a CVP incomestatement isa. Sales Variable costs - Fixed costs =Net income.b. Sales + Fixed costs = Variable costs +Net income.c. Noned. Sales Variable costs + Fixed costs =Net income.e. Sales Cost of goods sold + Operatingexpenses + Net income.Clear my choiceReliable Manufacturing wants to sell a sufficientquantity of products to earn a profit of $80 000. Ifthe unit sales price is $10, unit variable cost is$8, and total fixed costs are $160 000, how manyunits must be sold to earn income of $80 000?a. 30 000 unitsb. 1 200 000 unitsc. 80 000 unitsd. 120 000 unitsNoneClear my choiceA company desires to sell a sufficient quantity of products to earn a profit of $300 000. If theunit sales price is $20, unit variable cost is $12, and total fixed costs are $600 000, how manyunits must be sold to earn net income of $300 000?90 000 unitsa.b. Nonec. 67 500 unitsd. 112 500 unitse. 168 750 unitsClear my choice

Introduction:- CVP analysis is used to identify the changes in costs and volume affect a company's…

The equation which reflects a CVP income statement is a. Sales - Variable costs - Fixed costs = Net income. b. Sales + Fixed costs = Variable costs + Net income. c. None d. Sales - Variable costs + Fixed costs = Not incor

The equation which reflects a CVP income statement is a. Sales - Variable costs - Fixed costs = Net income. b. Sales + Fixed costs = Variable costs + Net income. c. None d. Sales - Variable costs + Fixed costs = Not incor

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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Consider the following statements: (1) Total costs will equal the sum of fixed and variable costs. (2) Total costs will equal the sum of direct and indirect costs. Which of these statements is/are correct? A. 2 only OB. 1 only OC. Neither 1 nor 2 OD. 1 and 2
1. The amount by which an item contributes towards covering fixed cost and providing for profit is known as: a. gross profit b. gross margin c. contribution margin d. net margin
Which format of the Income Statement is appropriate for financial reporting? O Variable costing O Activity-based O Absorption O any format is fine for financial reporting
Operating income can be calculated by: dividing fixed costs by the contribution margin ratio. multiplying fixed costs by the contribution margin ratio. multiplying the margin of safety by the contribution margin ratio. dividing the margin of safety by the contribution margin ratio.
Cost-volume-profit-analysis can be used to determine expected income from predicted sales and cost levels True False
When using CVP Analysis, Net Profit (positive NI) would occur when Fixed Costs (FC) exceed total Contribution Margin. TRUE FALSE
simple cost analysis method to identify fixed costs and variable costs in a linear cost function is ........ method
A CVP income statement shows contribution margin and gross profit. True False
(a) Variable Costs are costs that change in direct proportion to changes in activity level. (b) Unit variable cost remain constant regardless of the level of activity a. Both statements are true b. Both statements are false c. Statement A is true and statement B is false d. Statement A is false and statement B is true
In a cost-volume-profit (CVP) graph, the intersection of the total sales line and the total expense line represents which of the following? Multiple Choice The break-even point The total fixed expenses The total variable expenses The total contribution margin
Which of the following equations is correct for determining the required sales in units to generate a targeted amount of pre-tax income (πB) under the equation method (where Q = sales in units, F = total fixed costs, πB = pre-tax profit, v = variable cost per unit, and p = selling price per unit)?
Indicate how to present and analyze liabilities and contingencies.