Homework Answers
Correct Answer:
- Contribution margin ratio will remain the same with an increase in sales volume.
- Fixed cost per unit will decrease with an increase in sales volume. (Within the relevant range)
- A decrease in the contribution margin will cause the break-even point to decrease
- Variable cost per unit will remain the same with the decrease in sales volume
- An increase in fixed cost will cause the break-even point to increase
- An increase in sales volume will cause total fixed cost to remain the same.
End of answer.
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Fill in the blanks with increase, decrease, or remain the same to correctly complete each statement....
Fill in the blanks with increase, decrease, or remain the same to correctly complete each statement:...
Fill in the blanks with increase, decrease, or remain the same to correctly complete each statement: 1. Contribution margin ratio will _________ with an increase in sales volume. 2. Fixed cost per unit will_______ with an increase in sales volume (within the relevant range) 3. A decrease in the contribution margin will cause the break-even point to __________. 4. Variable cost per unit will _________ with a decrease in sales volume. 5. An increase in fixed costs will cause the...
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TRUE/FALSE Write 'T' if the statement is true and 'F' if the statement is false. 1) The degree of operating leverage in a company is smallest at the break-even point and increases as sales rise. _______ 2) The break-even point in units can be obtained by dividing the unit contribution margin by the total fixed expenses. _______ 3) An increase in the number of units sold will decrease a company's break-even point. _______ 4) The margin of safety is the...
14 15 16 17 18 Fill in the blanks. Use the following data to determine the contribution margin ratio. The apply thi...
14 15 16 17 18 Fill in the blanks. Use the following data to determine the contribution margin ratio. The apply this ratio to determine break even point in sales dollars: Sales revenue per unit $20 Variable cost per unit $12. Contribution margin per unit Contribution margin ratio % Fixed Costs 524,000 Break even point in sales dollars Edmonds, Edmonds, Tsay and Olds (2006). Fundamental Managerial Accounting Concepts, 3e. McGraw Hill, Irwin. New York, NY. Previous | Skip | Save...
A contribution margin income statement organizes costs by behavior
Contribution Margin Income StatementA contribution margin income statement organizes costs by behavior (variable or fixed), rather than by function (operating, selling, or administrative). The contribution margin is the difference between sales and variable expenses .Byron Manufacturing has one product that sells for $24.00 per unit. The company estimates fixed costs at $6,000, direct materials at $4.00 per unit, direct labor at $5.00 per unit, and variable overhead costs at $3.00 per unit.Fill in the contribution margin income statement when 730...
11 Part Question Required information [The following information applies to the questions displayed below.) $ Income...
11 Part Question
Required information [The following information applies to the questions displayed below.) $ Income Statement Sales (1,000 units) Variable expenses Contribution margin Fixed expenses Net operating income 80,000 52,000 28,000 21,840 6,160 $ Required: 1. What is the contribution margin per unit? (Round your answer to 2 decimal places.) Contribution margin per unit 2. What is the contribution margin ratio? Contribution margin ratio % 4. Assuming the increase is within the relevant range, if sales increase to 1,001...
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio,...
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio, a manager should decrease fixed cost. The contribution margin ratio represents the percentage of sales revenue available to contribute towards covering variable and fixed costs. At the breakeven point, total sales revenue equals total costs. If a company expands operations outside of its relevant range, variable cost per unit could change, but total fixed costs will always stay constant.
Problem 11-28 Determining the break-even point and preparing a contribution margin income statement LO 11-5 Ritchie...
Problem 11-28 Determining the break-even point and preparing a contribution margin income statement LO 11-5 Ritchie Manufacturing Company makes a product that it sells for $200 per unit. The company incurs variable manufacturing costs of $101 per unit. Variable selling expenses are $19 per unit, annual fixed manufacturing costs are $464,000, and fixed selling and administrative costs are $256,000 per year. Required Determine the break-even point in units and dollars using each of the following approaches: Use the equation method....
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio,...
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio, a manager should decrease fixed cost The contribution margin ratio represents the percentage of sales revenue available to contribute towards covering variable and fixed costs If a company expands operations outside of its relevant range, variable cost per unit could change, but total fixed costs will always stay constant ОО At the breakeven point total sales revenue equals total costs
Problem 3-17A (Algo) Determining the break-even point and preparing a contribution margin income statement LO 3-1...
Problem 3-17A (Algo) Determining the break-even point and preparing a contribution margin income statement LO 3-1 Ritchie Manufacturing Company makes a product that it sells for $130 per unit. The company incurs variable manufacturing costs of $66 per unit. Variable selling expenses are $12 per unit, annual fixed manufacturing costs are $450,000, and fixed selling and administrative costs are $226,000 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the...
Required information (The following information applies to the questions displayed below.) Income Statement Sales (1,898 units)...
Required information (The following information applies to the questions displayed below.) Income Statement Sales (1,898 units) Variable expenses Contribution margin Fixed expenses Net operating income 45, ose 31.500 13,500 8.640 4,860 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? The new sales volume is within the relevant range. Net operating income Required information (The following information applies to the questions displayed below.) Income...
14 15 16 17 18 Fill in the blanks. Use the following data to determine the contribution margin ratio. The apply this ratio to determine break even point in sales dollars: Sales revenue per unit $20 Variable cost per unit $12. Contribution margin per unit Contribution margin ratio % Fixed Costs 524,000 Break even point in sales dollars Edmonds, Edmonds, Tsay and Olds (2006). Fundamental Managerial Accounting Concepts, 3e. McGraw Hill, Irwin. New York, NY. Previous | Skip | Save...
11 Part Question
Required information [The following information applies to the questions displayed below.) $ Income Statement Sales (1,000 units) Variable expenses Contribution margin Fixed expenses Net operating income 80,000 52,000 28,000 21,840 6,160 $ Required: 1. What is the contribution margin per unit? (Round your answer to 2 decimal places.) Contribution margin per unit 2. What is the contribution margin ratio? Contribution margin ratio % 4. Assuming the increase is within the relevant range, if sales increase to 1,001...
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio, a manager should decrease fixed cost The contribution margin ratio represents the percentage of sales revenue available to contribute towards covering variable and fixed costs If a company expands operations outside of its relevant range, variable cost per unit could change, but total fixed costs will always stay constant ОО At the breakeven point total sales revenue equals total costs
Problem 3-17A (Algo) Determining the break-even point and preparing a contribution margin income statement LO 3-1 Ritchie Manufacturing Company makes a product that it sells for $130 per unit. The company incurs variable manufacturing costs of $66 per unit. Variable selling expenses are $12 per unit, annual fixed manufacturing costs are $450,000, and fixed selling and administrative costs are $226,000 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the...
Required information (The following information applies to the questions displayed below.) Income Statement Sales (1,898 units) Variable expenses Contribution margin Fixed expenses Net operating income 45, ose 31.500 13,500 8.640 4,860 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? The new sales volume is within the relevant range. Net operating income Required information (The following information applies to the questions displayed below.) Income...
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