Which of the following would not be anacceptable way to express contributionmargin? *O 100% minus variable cost percentageUnit selling price minus unit variablecostsContribution margin per unit dividedby unit selling priceVariable costs divided by total salesrevenueNone of the above The equation which reflects a CVPincome statement is *Sales = Cost of goods sold +Operating expenses + Net incomeSales + Fixed costs = Variable costs +Net incomeSales - Variable costs + Fixed costs =Net incomeSales - Variable costs - Fixed costs%3DNet incomeO None of the above

The correct option is fourth. As the formula of dividing variable cost by sales revenue is used for…

Which of the following would not be an acceptable way to express contribution margin? * 100% minus variable cost percentage Unit selling price minus unit variable costs Contribution margin per unit divided by unit selling price Variable costs divided by total sales revenue None of the above

Which of the following would not be an acceptable way to express contribution margin? * 100% minus variable cost percentage Unit selling price minus unit variable costs Contribution margin per unit divided by unit selling price Variable costs divided by total sales revenue None of the above

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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Question

Which of the following would not be an
acceptable way to express contribution
margin? *
O 100% minus variable cost percentage
Unit selling price minus unit variable
costs
Contribution margin per unit divided
by unit selling price
Variable costs divided by total sales
revenue
None of the above

The equation which reflects a CVP
income statement is *
Sales = Cost of goods sold +
Operating expenses + Net income
Sales + Fixed costs = Variable costs +
Net income
Sales - Variable costs + Fixed costs =
Net income
Sales - Variable costs - Fixed costs
%3D
Net income
O None of the above

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Which of the following statements is true? I. Incremental analysis is an analytical approach that focuses only on those revenues and costs that will not change as a result of a decision. II. When expressed on a per unit basis, fixed costs can mislead decision makers into thinking of them as variable costs. II. To estimate what the profit will be at various levels of sales volume, multiply the number of units to be sold above or below the break-even point by the unit contribution margin. Statements I and III are true. Statements II and III are true. All of the statements are true. None of the statements are true.
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.
26..
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 $48,000? b. What is the current margin of safety in units? c. What is the margin of safety in sales dollars? d. What is the margin of safety in percentage?
On the costvolume - profit graph which of the following would result into a decrease in the breakeven point (Assuming other factors remain unchanged )? a. Decrease in number of units sold b.Decrease in selling price per unit c. Increase in fixed costs d. Decrease in variable cost per unit e. None of the given answers
The contribution margin ratio is calculated as: O a. The selling price per unit ratio /variable cost per unit ratio O b. Selling price per unit the variable cost per unit O c. None of the given answers O d. The selling price per unit/variable cost per unit e. (total sales/total sales) – variable cost ratio
Explain how the unit contribution margin can be used todetermine the unit sales required to break even.
6. The unit contribution margin is computed by⦁ subtracting the variable cost per unit from the sales price per unit.⦁ dividing the sales revenue by variable cost per unit.⦁ dividing the variable cost per unit by the sales revenue.⦁ subtracting the sales price per unit from the variable cost per unit.
Which of the following statements about CVP analysis is false? O a. Operating income calculations in CVP analysis are based on contribution margin not gross margin. O b. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. Oc. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income O d. Total revenues and total costs are linear in relation to output units. O e. All of the given answers are true. LEVIOUS PAGE FINISH ATTEMPT ... Finish Esc FnLock F1 F2 F3 F4 FB F9 F10 F11 @ 23 2$ % 1 3 4 6 8. Q W E IT Y S G Y J L. C NIM 24 Alt こ0 >
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Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs can be divided into variable and fixed components O b. Costs are nonlinear Fixed cost per unit is not constant О с. O d. Sales mix of products sold does not change e. Selling price per unit does not change with volume O O 0 O O