Variable Cost: The cost which is not fixed is called as variable cost. This cost is directly proportional to the level of output produced, it increase with increase in output and vice versa. Contribution Margin: The process or theory which is used to judge the benefit given by each unit of the goods produced is called as contribution margin. Break-Even Point: It is the point of sales at which a company earns zero profit as cost incurred in production is equal to the total revenue. Required Sale: Required sale refers to the sales required to earn desired income and achieve goals of the business. It can be calculated based on fixed cost, contribution and target income. Margin of Safety: Margin of safety is the excess of expected sales over break even sales of the business. It is the amount of sales which indicate the safety margin. To determine: Variable costs per unit.

Question

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Answer 1

Question

Chapter 22, Problem 22CDCP

(a)

To determine

Variable Cost: The cost which is not fixed is called as variable cost. This cost is directly proportional to the level of output produced, it increase with increase in output and vice versa.

Contribution Margin: The process or theory which is used to judge the benefit given by each unit of the goods produced is called as contribution margin.

Break-Even Point: It is the point of sales at which a company earns zero profit as cost incurred in production is equal to the total revenue.

Required Sale: Required sale refers to the sales required to earn desired income and achieve goals of the business. It can be calculated based on fixed cost, contribution and target income.

Margin of Safety: Margin of safety is the excess of expected sales over break even sales of the business. It is the amount of sales which indicate the safety margin.

To determine: Variable costs per unit.

(b)

To determine

Unit contribution margin.

(c)

To determine

Break-even point in units.

(d)

To determine

Required sales to achieve goals.

(e)

To determine

Margin of safety and margin of safety ratio.

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What is the contribution margin per unit?

Answer 2

Question

Chapter 22, Problem 22CDCP

(a)

To determine

Variable Cost: The cost which is not fixed is called as variable cost. This cost is directly proportional to the level of output produced, it increase with increase in output and vice versa.

Contribution Margin: The process or theory which is used to judge the benefit given by each unit of the goods produced is called as contribution margin.

Break-Even Point: It is the point of sales at which a company earns zero profit as cost incurred in production is equal to the total revenue.

Required Sale: Required sale refers to the sales required to earn desired income and achieve goals of the business. It can be calculated based on fixed cost, contribution and target income.

Margin of Safety: Margin of safety is the excess of expected sales over break even sales of the business. It is the amount of sales which indicate the safety margin.

To determine: Variable costs per unit.

(b)

To determine

Unit contribution margin.

(c)

To determine

Break-even point in units.

(d)

To determine

Required sales to achieve goals.

(e)

To determine

Margin of safety and margin of safety ratio.

Expert Solution & Answer

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Answer 3

Question

Chapter 22, Problem 22CDCP

(a)

To determine

Variable Cost: The cost which is not fixed is called as variable cost. This cost is directly proportional to the level of output produced, it increase with increase in output and vice versa.

Contribution Margin: The process or theory which is used to judge the benefit given by each unit of the goods produced is called as contribution margin.

Break-Even Point: It is the point of sales at which a company earns zero profit as cost incurred in production is equal to the total revenue.

Required Sale: Required sale refers to the sales required to earn desired income and achieve goals of the business. It can be calculated based on fixed cost, contribution and target income.

Margin of Safety: Margin of safety is the excess of expected sales over break even sales of the business. It is the amount of sales which indicate the safety margin.

To determine: Variable costs per unit.

(b)

To determine

Unit contribution margin.

(c)

To determine

Break-even point in units.

(d)

To determine

Required sales to achieve goals.

(e)

To determine

Margin of safety and margin of safety ratio.

Expert Solution & Answer

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Answer 4

Question

Chapter 22, Problem 22CDCP

(a)

To determine

Variable Cost: The cost which is not fixed is called as variable cost. This cost is directly proportional to the level of output produced, it increase with increase in output and vice versa.

Contribution Margin: The process or theory which is used to judge the benefit given by each unit of the goods produced is called as contribution margin.

Break-Even Point: It is the point of sales at which a company earns zero profit as cost incurred in production is equal to the total revenue.

Required Sale: Required sale refers to the sales required to earn desired income and achieve goals of the business. It can be calculated based on fixed cost, contribution and target income.

Margin of Safety: Margin of safety is the excess of expected sales over break even sales of the business. It is the amount of sales which indicate the safety margin.

To determine: Variable costs per unit.

(b)

To determine

Unit contribution margin.

(c)

To determine

Break-even point in units.

(d)

To determine

Required sales to achieve goals.

(e)

To determine

Margin of safety and margin of safety ratio.

Expert Solution & Answer

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Answer 5

Chapter 22, Problem 22CDCP

(a)

To determine

Variable Cost: The cost which is not fixed is called as variable cost. This cost is directly proportional to the level of output produced, it increase with increase in output and vice versa.

Contribution Margin: The process or theory which is used to judge the benefit given by each unit of the goods produced is called as contribution margin.

Break-Even Point: It is the point of sales at which a company earns zero profit as cost incurred in production is equal to the total revenue.

Required Sale: Required sale refers to the sales required to earn desired income and achieve goals of the business. It can be calculated based on fixed cost, contribution and target income.

Margin of Safety: Margin of safety is the excess of expected sales over break even sales of the business. It is the amount of sales which indicate the safety margin.

To determine: Variable costs per unit.

(b)

To determine

Unit contribution margin.

(c)

To determine

Break-even point in units.

(d)

To determine

Required sales to achieve goals.

(e)

To determine

Margin of safety and margin of safety ratio.

Answer 6

Chapter 22, Problem 22CDCP

(a)

To determine

Variable Cost: The cost which is not fixed is called as variable cost. This cost is directly proportional to the level of output produced, it increase with increase in output and vice versa.

Contribution Margin: The process or theory which is used to judge the benefit given by each unit of the goods produced is called as contribution margin.

Break-Even Point: It is the point of sales at which a company earns zero profit as cost incurred in production is equal to the total revenue.

Required Sale: Required sale refers to the sales required to earn desired income and achieve goals of the business. It can be calculated based on fixed cost, contribution and target income.

Margin of Safety: Margin of safety is the excess of expected sales over break even sales of the business. It is the amount of sales which indicate the safety margin.

To determine: Variable costs per unit.

Answer 7

Chapter 22, Problem 22CDCP

(a)

To determine

Variable Cost: The cost which is not fixed is called as variable cost. This cost is directly proportional to the level of output produced, it increase with increase in output and vice versa.

Contribution Margin: The process or theory which is used to judge the benefit given by each unit of the goods produced is called as contribution margin.

Break-Even Point: It is the point of sales at which a company earns zero profit as cost incurred in production is equal to the total revenue.

Required Sale: Required sale refers to the sales required to earn desired income and achieve goals of the business. It can be calculated based on fixed cost, contribution and target income.

Margin of Safety: Margin of safety is the excess of expected sales over break even sales of the business. It is the amount of sales which indicate the safety margin.

To determine: Variable costs per unit.

Answer 8

(b)

To determine

Unit contribution margin.

Answer 9

(b)

To determine

Unit contribution margin.

Answer 10

(c)

To determine

Break-even point in units.

Answer 11

(c)

To determine

Break-even point in units.

Answer 12

(d)

To determine

Required sales to achieve goals.

Answer 13

(d)

To determine

Required sales to achieve goals.

Answer 14

(e)

To determine

Margin of safety and margin of safety ratio.

Answer 15

(e)

To determine

Margin of safety and margin of safety ratio.

Answer 16

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Answer 17

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Answer 18

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Answer 19

Ch. 22 - Prob. 1Q Ch. 22 - Prob. 2Q Ch. 22 - Prob. 3Q Ch. 22 - Prob. 4Q Ch. 22 - Prob. 5Q Ch. 22 - Prob. 6Q Ch. 22 - Prob. 7Q Ch. 22 - Prob. 8Q Ch. 22 - 9. “Cost-volume-profit (CVP) analysis is based...Ch. 22 - Prob. 10Q

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Unit contribution margin.

Break-even point in units.

Required sales to achieve goals.

Margin of safety and margin of safety ratio.

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