Variable cost, fixed cost, contribution margin, net operating income: Variable costs are directly related with production process, so it has the changes according to the sales revenue. Fixed costs are indirectly related with production process, so it hasn’t change according to the sales revenue. Contribution income is derived after deducting variable costs from sales revenue. Net operating income is the real income for the company because it has derived after deduction all costs such as variable and fixed costs from sales revenue. Whether increase of sales by 10% would change the variable costs and fixed costs. Whether contribution margin increased or not by the new sales revenue (10%). Whether net operating income increased or not by new sales revenue (10%).

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Answer 1

Question

Chapter 1, Problem 2AE

To determine

Variable cost, fixed cost, contribution margin, net operating income:

Variable costs are directly related with production process, so it has the changes according to the sales revenue.

Fixed costs are indirectly related with production process, so it hasn’t change according to the sales revenue.

Contribution income is derived after deducting variable costs from sales revenue.

Net operating income is the real income for the company because it has derived after deduction all costs such as variable and fixed costs from sales revenue.

Whether increase of sales by 10% would change the variable costs and fixed costs.

Whether contribution margin increased or not by the new sales revenue (10%).

Whether net operating income increased or not by new sales revenue (10%).

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Answer 2

Question

Chapter 1, Problem 2AE

To determine

Variable cost, fixed cost, contribution margin, net operating income:

Variable costs are directly related with production process, so it has the changes according to the sales revenue.

Fixed costs are indirectly related with production process, so it hasn’t change according to the sales revenue.

Contribution income is derived after deducting variable costs from sales revenue.

Net operating income is the real income for the company because it has derived after deduction all costs such as variable and fixed costs from sales revenue.

Whether increase of sales by 10% would change the variable costs and fixed costs.

Whether contribution margin increased or not by the new sales revenue (10%).

Whether net operating income increased or not by new sales revenue (10%).

Expert Solution & Answer

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Answer 3

Question

Chapter 1, Problem 2AE

To determine

Variable cost, fixed cost, contribution margin, net operating income:

Variable costs are directly related with production process, so it has the changes according to the sales revenue.

Fixed costs are indirectly related with production process, so it hasn’t change according to the sales revenue.

Contribution income is derived after deducting variable costs from sales revenue.

Net operating income is the real income for the company because it has derived after deduction all costs such as variable and fixed costs from sales revenue.

Whether increase of sales by 10% would change the variable costs and fixed costs.

Whether contribution margin increased or not by the new sales revenue (10%).

Whether net operating income increased or not by new sales revenue (10%).

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Answer 4

Question

Chapter 1, Problem 2AE

To determine

Variable cost, fixed cost, contribution margin, net operating income:

Variable costs are directly related with production process, so it has the changes according to the sales revenue.

Fixed costs are indirectly related with production process, so it hasn’t change according to the sales revenue.

Contribution income is derived after deducting variable costs from sales revenue.

Net operating income is the real income for the company because it has derived after deduction all costs such as variable and fixed costs from sales revenue.

Whether increase of sales by 10% would change the variable costs and fixed costs.

Whether contribution margin increased or not by the new sales revenue (10%).

Whether net operating income increased or not by new sales revenue (10%).

Expert Solution & Answer

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Answer 5

Chapter 1, Problem 2AE

To determine

Variable cost, fixed cost, contribution margin, net operating income:

Variable costs are directly related with production process, so it has the changes according to the sales revenue.

Fixed costs are indirectly related with production process, so it hasn’t change according to the sales revenue.

Contribution income is derived after deducting variable costs from sales revenue.

Net operating income is the real income for the company because it has derived after deduction all costs such as variable and fixed costs from sales revenue.

Whether increase of sales by 10% would change the variable costs and fixed costs.

Whether contribution margin increased or not by the new sales revenue (10%).

Whether net operating income increased or not by new sales revenue (10%).

Answer 6

Chapter 1, Problem 2AE

To determine

Variable cost, fixed cost, contribution margin, net operating income:

Variable costs are directly related with production process, so it has the changes according to the sales revenue.

Fixed costs are indirectly related with production process, so it hasn’t change according to the sales revenue.

Contribution income is derived after deducting variable costs from sales revenue.

Net operating income is the real income for the company because it has derived after deduction all costs such as variable and fixed costs from sales revenue.

Whether increase of sales by 10% would change the variable costs and fixed costs.

Whether contribution margin increased or not by the new sales revenue (10%).

Whether net operating income increased or not by new sales revenue (10%).

Answer 7

Chapter 1, Problem 2AE

To determine

Variable cost, fixed cost, contribution margin, net operating income:

Variable costs are directly related with production process, so it has the changes according to the sales revenue.

Fixed costs are indirectly related with production process, so it hasn’t change according to the sales revenue.

Contribution income is derived after deducting variable costs from sales revenue.

Net operating income is the real income for the company because it has derived after deduction all costs such as variable and fixed costs from sales revenue.

Whether increase of sales by 10% would change the variable costs and fixed costs.

Whether contribution margin increased or not by the new sales revenue (10%).

Whether net operating income increased or not by new sales revenue (10%).

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 1 - Prob. 1Q Ch. 1 - Define the following: (a) direct materials, (b)...Ch. 1 - Explain the difference between a product cost and...Ch. 1 - Distinguish between (a) a variable cost, (b) a...Ch. 1 - Prob. 5Q Ch. 1 - Define the following terms: (a) cost behavior and...Ch. 1 - What is meant by an activity base when dealing...Ch. 1 - Prob. 8Q Ch. 1 - Distinguish between discretionary fixed costs and...Ch. 1 - Does the concept of the relevant range apply to...

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