Which of the following statements about CVP analysis is false?O a. Operating income calculations in CVP analysis are based on contribution margin not grossmargin.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 elementssuch as total revenues, total costs, and incomeO d. Total revenues and total costs are linear in relation to output units.O e. All of the given answers are true.OUS PAGEFINISH ATTEMPT ...F1F2F3F4F5F6F7F8F1023%&23478.VQWTAFK13C VBYNI M24S

Cost volume profit analysis is the analysis in which the relationship between cost, volume and…

Which of the following statements about CVP analysis is false O a. Operating income calculations in CVP analysis are ba margin. O b. Unit selling price, unit variable costs, and total fixed c Oc. Managers use (CVP) analysis to study the behavior of such as total revenues, total costs, and income

Which of the following statements about CVP analysis is false O a. Operating income calculations in CVP analysis are ba margin. O b. Unit selling price, unit variable costs, and total fixed c Oc. Managers use (CVP) analysis to study the behavior of such as total revenues, total costs, and income

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Following GAAP, the income statement issued to in OA. be prepared in the contribution margin forma…

A: The three most important financial statements are enumerated as below:Income Statement Balance…

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: As compared to a traditional income statement format, which of the following terms do not appear on…

A: Where in the traditional income statement, Expenses are categorized in two different categories…

Q: When Total Contribution magrin equals total fixed costs, this indicates operating income True…

A: If the contribution margin is equal to the total fixed cost that means it a situation of the…

Q: when total contribution margin equals total fixed cost this indicates operating income true false

A: First we understand contribution margin Contribution margin means Variable cost deduct from Sales…

Q: Which of the following is NOT true about the cause-and-effect criterion when estimating a cost…

A: The cause and effect analysis is one of the factors for making cost allocation decisions. The cost…

Q: Describe following:* Market approach* Income approach* Cost approach

A: Market Approach: Market approach is a method used to assess the value of an asset depending on the…

Q: What is operating profitability ratio (OP)?

A: These ratios evaluate a firm’s ability to earn profits. They help the stakeholders of the company to…

Q: Which of the following statements is true? Select one: O a. The most complex of the cost estimation…

A: High-low method: It is the method of estimating the variable cost per unit and the fixed costs by…

Q: Cost-volume-profit analysis is used to make many decisions, including product pricing and…

A: cost volume profit analysis (CVP analysis) is used to determine many factors such as 1)desired…

Q: Identify two ways in which a contribution margin income statement differs in format from a…

A: Contribution margin income statements are those that reflect the contribution amount that remains…

Q: Which format of the Income Statement is appropriate for financial reporting? O Variable costing O…

A: The appropriate format for the Income Statement for financial reporting is typically the Absorption…

Q: The “plus” in cost-plus pricing is often referred to as Markup. Extra profit. Gross profit.…

A: Cost plus pricing means when selling price is fixed as a addition of profit on the cost price. For…

Q: On a cost-volume-profit graph, the revenue line will be shown below the total expense line for any…

A: A cost-volume-profit graph illustrates how changes in sales volume affect a company's profit by…

Q: Which of the following statements is FALSE? a. The mark up is a percentage applied to base cost. O…

A: Markup is the percentage computed on the amount of cost to know the markup applied by the entity on…

Q: Question: In marginal accounting, what is the primary focus when analyzing costs and revenues? A)…

A: Important Point = Total variable cost increases or decrease depending on a company production volume…

Q: Management uses Cost Volume Profit (CPV) analysis as a planning process to predict the future volume…

A: The use of CVP analysis is severely constrained by a number of underlying assumptions. Anyone…

Question

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

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Profitability changes may be simply calculated by using what kind of tool: sales price/volume/variable costs/fixed costs.
The equation for total costs (Y) is: Y = a+ bX In this equation, “a” represents: Net income Cost of goods sold Total fixed costs The level of activity (e.g., the number of units produced) Total variable costs Variable cost per unit of X Total revenue
Consider the following two statements concerning cost-volume-profit analysis. (1) The contribution per unit is the difference between the sales price per unit and the fixed costs per unit. (2) The marginal cost per unit will usually equal the variable cost per unit. Which one of the following combinations ( true/false) relating to the above statements is correct?
To make predictions about costs and income, you must first classify costs by their behavior. True False
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
Which of the following is not a method used by managers to determine cost behavior? High-low Method Scatterplot Account analysis Regression Analysis Derivation
Cost-volume-profit analysis is used to make many decisions, including product pricing and controlling costs. What are the limitations of using operating leverage to predict profitability?
Fixed costs, variable costs, and revenues are all included in profitability analysis? Select one: O True O False
The contribution margin approach helps managers in short-term decision making because it A. reports costs and revenues at present value B. reports only mixed costs C. treats fixed manufacturing overhead as product costs D. isolates costs by behavior