Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781337517386
Author: WARREN
Publisher: Cengage
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 11.3E
To determine
Concept Introduction:
Cost Volume Profit (CVP) Analysis:
The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.
Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:
Contribution margin = Sales - Variable cost.
Similarly contribution margin ratio = Contribution/sales
To Indicate:
The Correct Activity base for each Cost
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Identify a particular support function of a college (the library, for example). Discuss possible allocation bases that might be used to allocate costs in the function to programs (degrees) or students.
Define direct costs and indirect costs and prepare a list of three direct and three indirect costs for the Accounting Department at your university.
1.The following are various activities for a business school
Required
Suggest a feasible cost driver base for each of the following, and explain why cach selected cost driver base is feasible
a. Faculty teaching
b. Career placement: Scheduling interviews
C. Career placement: Counseling students
d. Course registration
e. Course scheduling
f. Admissions: Attending BBA and MBA fairs.
g. Admissions: Interviewing applicants
h. Admissions: Evaluating applications.
Chapter 11 Solutions
Survey of Accounting (Accounting I)
Ch. 11 - Which of the following statements describes...Ch. 11 - If sales are $500,000, variable costs are...Ch. 11 - If the unit selling price is $16. the unit...Ch. 11 - Based on the data presented in Question 3, how...Ch. 11 - Prob. 5SEQCh. 11 - Describe how total variable costs and unit...Ch. 11 - How would each of the following costs be...Ch. 11 - Describe the behavior of (a) total fixed costs and...Ch. 11 - How would each of the following costs be...Ch. 11 - In cost analyses, how arc mixed costs treated?
Ch. 11 - Which of the following graphs illustrates how...Ch. 11 - Which of the following graphs illustrates how unit...Ch. 11 - Which of the following graphs best illustrates...Ch. 11 - In applying the high-low method of Cost...Ch. 11 - Prob. 10CDQCh. 11 - Prob. 11CDQCh. 11 - Prob. 12CDQCh. 11 - If insurance rates are increased, what effect will...Ch. 11 - Prob. 14CDQCh. 11 - The reliability of cost-volume-profit (CVP)...Ch. 11 - How does the sales mix affect the calculation of...Ch. 11 - Prob. 17CDQCh. 11 - Classify costs Following is a list of various...Ch. 11 - Identify cost graphs The following cost graphs...Ch. 11 - Prob. 11.3ECh. 11 - Identify activity bases From the following list of...Ch. 11 - Identify fixed and variable costs Intuit Inc....Ch. 11 - Relevant range and fixed and variable costs Third...Ch. 11 - High-low method Liberty Inc. has decided to use...Ch. 11 - High-low method for service company Miss River...Ch. 11 - Contribution margin ratio a. Matzinger Company...Ch. 11 - Contribution margin and contribution margin ratio...Ch. 11 - Break-even sales and sales to realize operating...Ch. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - Break-even analysis The Garden Club of Palm...Ch. 11 - Break-even analysis Media outlets such as ESPN and...Ch. 11 - Prob. 11.16ECh. 11 - Prob. 11.17ECh. 11 - Prob. 11.18ECh. 11 - Prob. 11.19ECh. 11 - Prob. 11.20ECh. 11 - Break-even sales and sales mix for a service...Ch. 11 - Operating leverage SunRise Inc. and SunSet Inc....Ch. 11 - Classify costs Peak Apparel Co. manufactures a...Ch. 11 - Break-even sales under present and proposed...Ch. 11 - Prob. 11.2.2PCh. 11 - Prob. 11.2.3PCh. 11 - Prob. 11.2.4PCh. 11 - Prob. 11.2.5PCh. 11 - Break-even sales under present and proposed...Ch. 11 - Prob. 11.2.7PCh. 11 - Prob. 11.2.8PCh. 11 - Break-even sales and cost-volume-profit graph For...Ch. 11 - Prob. 11.3.2PCh. 11 - Break-even sales and cost-volume-profit graph For...Ch. 11 - Prob. 11.3.4PCh. 11 - Prob. 11.4.1PCh. 11 - Prob. 11.4.2PCh. 11 - Prob. 11.4.3PCh. 11 - Prob. 11.4.4PCh. 11 - Prob. 11.5.1PCh. 11 - Prob. 11.5.2PCh. 11 - Sales mix and break-even sales Data related to the...Ch. 11 - Prob. 11.5.4PCh. 11 - Prob. 11.5.5PCh. 11 - Contribution margin, break-even sales,...Ch. 11 - Contribution margin, break-even sales,...Ch. 11 - Contribution margin, break-even sales,...Ch. 11 - Contribution margin, break-even sales,...Ch. 11 - Contribution margin, break-even sales,...Ch. 11 - Margin of safety a. If Go-Go Buggies Company, with...Ch. 11 - Prob. 11.2MBACh. 11 - Margin of safety Use the data from E11-12 and...Ch. 11 - Margin of safety Use the data from E11-12 and...Ch. 11 - Sales mix and margin of safety Use the data from...Ch. 11 - Prob. 11.4.2MBACh. 11 - Prob. 11.4.3MBACh. 11 - Margin of safety Using the data from P11-2,...Ch. 11 - Prob. 11.5.2MBACh. 11 - Margin of safety Using the data from P11-6....Ch. 11 - Prob. 11.6.2MBACh. 11 - Prob. 11.6.3MBACh. 11 - Prob. 11.1CCh. 11 - Break-even sales, contribution margin "Every...Ch. 11 - Break-even analysis Aquarius Games Inc. has...Ch. 11 - Variable costs and activity bases in decision...Ch. 11 - Variable costs and activity bases in decision...Ch. 11 - Prob. 11.6C
Knowledge Booster
Similar questions
- Attending college involves incurring many costs. Select the example of a college cost that could be assigned to each of the following classifications. a. Sunk cost b. Discretionary cost c. Committed cost d. Opportunity cost e. Differential cost f. Allocated costarrow_forwardGive examples of various costs Attending college involves incurring many costs. Give an example of a college cost that could be assigned to each of the following classifications. Explain your reason for assigning each cost to the classification. Sunk cost. Discretionary cost. Committed cost. Opportunity cost. Differential cost. Allocated cost.arrow_forwardMatching Following are a number of key terms and concepts introduced in thechapter, along with a list of corresponding definitions. Match the appropriate letter for the key term or concept to each definition provided (items 1–12). Note thatnot all key terms and concepts will be used. Answers are provided at the end of thischapter.a. Cost–volume–profit analysisb. Cost formulac. Contribution margind. Contribution margin formatincome statemente. Linearity assumptionf. Contribution margin ratiog. Operating leverageh. Sales mixi. Break-even pointj. High–low techniquek. Managerial accountingl. Management processm. Variable costn. Fixed costo. Relevant rangep. Mixed (semivariable) costq. Cost behavior pattern____ 1. The proportion of total sales represented by various products or categoriesof products.____ 2. The difference between revenues and variable costs.____ 3. The concept that operating income changes proportionately more than revenues for any given change in revenues.____ 4. The…arrow_forward
- Strathmore University can use various cost centres and cost units for cost estimation purposeswithin its cost accounting information system.i) Explain the distinction between a cost centre and a cost unit as used in cost accountingand give two examples of cost centres and two examples of cost units that Strathmore mayuse within its cost accounting information systemarrow_forwardIn developing an ABC system, what is the last step? Identify the primary activities and estimate a total cost pool for each. Select an allocation base for each activity. Allocate the costs to the cost object using the activity cost allocation rates. Calculate an activity cost allocation rate for each activity.arrow_forwardWhat are the total fixed costs of operating the university? What are the variable cost and contribution margin per student at the university? What is the contribution margin ratio for Lihue University?arrow_forward
- Why does support department cost allocation matter to service businesses (such as colleges and universities)? Please explain the importance. Also, identify three businesses, companies, or non-profit organizations that you think would use support department cost allocation. Name the company and their corresponding support departments.arrow_forwardDiscuss the history of ABC method (Use references if you use any) Define the following with examples: a) Activity Rate b) Cost Driverarrow_forwardFor the following activities and their associated resources, identify the following: (1) a cost driver, (2) flexible resources, and (3) committed resources. Also, label each resource as one of the following with respect to the cost driver: (a) variable and (b) fixed.arrow_forward
- Distinguish between a profit center and an investment center. Draw a diagram illustrating the relationship between cost, profit, and investment centers.arrow_forwardActivity rates are determined by O a. dividing the cost budgeted for each activity pool by the actual activity base for that pool Ob. dividing the actual cost for each activity pool by the actual activity base for that pool Oc. dividing the cost budgeted for each activity pool by the estimated activity base for that pool Od. dividing the actual cost for each activity pool by the estimated activity base for that poolarrow_forwardIn the context of a local/regional organization, explain the idea of “cost object”. Discuss the four “responsibility centres”, in the selected organization, which are linked to responsibility accounting. What are the main drawbacks of responsibility accounting? Support your answer with relevant examples.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning