The amount of a unit’s sales price that helps to cover fixed expenses is its ____________________. A. contribution margin B. profit C. variable cost D. stepped cost

Question

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Answer 1

Textbook Question

Chapter 3, Problem 1MC

The amount of a unit’s sales price that helps to cover fixed expenses is its ____________________.

A. contribution margin

B. profit

C. variable cost

D. stepped cost

Expert Solution & Answer

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 to determine the breakeven point and the required 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:

Contribution margin = Sales - Variable cost.

Similarly, contribution margin ratio = Contribution/sales

To choose:

The correct term for amount of unit’s sales price that helps to cover fixed expenses.

Answer to Problem 1MC

Option A: Contribution Margin

Explanation of Solution

Explanation for correct answer:

The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence the correct option is A.

Explanation for incorrect answers:

Option B: The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence this option is incorrect.

Option C: The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

Option D:The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

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Answer 2

Textbook Question

Chapter 3, Problem 1MC

The amount of a unit’s sales price that helps to cover fixed expenses is its ____________________.

A. contribution margin

B. profit

C. variable cost

D. stepped cost

Expert Solution & Answer

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 to determine the breakeven point and the required 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:

Contribution margin = Sales - Variable cost.

Similarly, contribution margin ratio = Contribution/sales

To choose:

The correct term for amount of unit’s sales price that helps to cover fixed expenses.

Answer to Problem 1MC

Option A: Contribution Margin

Explanation of Solution

Explanation for correct answer:

The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence the correct option is A.

Explanation for incorrect answers:

Option B: The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence this option is incorrect.

Option C: The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

Option D:The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

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Answer 3

Textbook Question

Chapter 3, Problem 1MC

The amount of a unit’s sales price that helps to cover fixed expenses is its ____________________.

A. contribution margin

B. profit

C. variable cost

D. stepped cost

Expert Solution & Answer

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 to determine the breakeven point and the required 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:

Contribution margin = Sales - Variable cost.

Similarly, contribution margin ratio = Contribution/sales

To choose:

The correct term for amount of unit’s sales price that helps to cover fixed expenses.

Answer to Problem 1MC

Option A: Contribution Margin

Explanation of Solution

Explanation for correct answer:

The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence the correct option is A.

Explanation for incorrect answers:

Option B: The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence this option is incorrect.

Option C: The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

Option D:The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

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Answer 4

Textbook Question

Chapter 3, Problem 1MC

The amount of a unit’s sales price that helps to cover fixed expenses is its ____________________.

A. contribution margin

B. profit

C. variable cost

D. stepped cost

Expert Solution & Answer

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 to determine the breakeven point and the required 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:

Contribution margin = Sales - Variable cost.

Similarly, contribution margin ratio = Contribution/sales

To choose:

The correct term for amount of unit’s sales price that helps to cover fixed expenses.

Answer to Problem 1MC

Option A: Contribution Margin

Explanation of Solution

Explanation for correct answer:

The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence the correct option is A.

Explanation for incorrect answers:

Option B: The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence this option is incorrect.

Option C: The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

Option D:The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

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 to determine the breakeven point and the required 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:

Contribution margin = Sales - Variable cost.

Similarly, contribution margin ratio = Contribution/sales

To choose:

The correct term for amount of unit’s sales price that helps to cover fixed expenses.

Answer to Problem 1MC

Option A: Contribution Margin

Explanation of Solution

Explanation for correct answer:

The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence the correct option is A.

Explanation for incorrect answers:

Option B: The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence this option is incorrect.

Option C: The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

Option D:The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

Answer 8

Expert Solution & Answer

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 to determine the breakeven point and the required 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:

Contribution margin = Sales - Variable cost.

Similarly, contribution margin ratio = Contribution/sales

To choose:

The correct term for amount of unit’s sales price that helps to cover fixed expenses.

Answer to Problem 1MC

Option A: Contribution Margin

Explanation of Solution

Explanation for correct answer:

The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence the correct option is A.

Explanation for incorrect answers:

Option B: The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence this option is incorrect.

Option C: The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

Option D:The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

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 to determine the breakeven point and the required 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:

Contribution margin = Sales - Variable cost.

Similarly, contribution margin ratio = Contribution/sales

To choose:

The correct term for amount of unit’s sales price that helps to cover fixed expenses.

Answer 12

Answer to Problem 1MC

Option A: Contribution Margin

Answer 13

Explanation of Solution

Explanation for correct answer:

The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence the correct option is A.

Explanation for incorrect answers:

Option B: The amount of unit’s sales price that helps to cover fixed cost is Contribution Margin. Hence this option is incorrect.

Option C: The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

Option D:The amount of unit’s sales price that helps to cover fixed is Contribution Margin. Hence this option is incorrect.

Answer 14

Ch. 3 - The amount of a units sales price that helps to...Ch. 3 - A companys product sells for $150 and has variable...Ch. 3 - A companys product sells for $150 and has variable...Ch. 3 - A companys contribution margin per unit is $25. It...Ch. 3 - A company sells its products for $80 per unit and...Ch. 3 - If a company has fixed costs of $6.000 per month...Ch. 3 - Company A wants to earn $5,000 profit in the month...Ch. 3 - A company has wants to earn an income of $60,000...Ch. 3 - A company has pre-tax or operating income of...Ch. 3 - When sales price increases and all other variables...

The amount of a unit’s sales price that helps to cover fixed expenses is its ____________________. A. contribution margin B. profit C. variable cost D. stepped cost

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Answer to Problem 1MC

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