Which of the following items is not subtracted from sales revenue to arrive at contribution margin...
Which of the following items is not subtracted from sales revenue to arrive at contribution margin on a contribution margin income statement?
|
variable manufacturing overhead |
||
|
sales commissions paid only on items that are sold |
||
|
variable sales and administrative expenses |
||
|
fixed manufacturing overhead |
A special order will increase net income when?
| a. |
additional revenue from the special order is greater than the additional costs, including any sunk costs |
|
| b. |
additional revenue from the special order is greater than the additional costs, including any direct material costs |
|
| c. |
additional revenue from the special order is greater than the additional costs, including any period costs |
|
| d. |
additional revenue from the special order is greater than the additional costs, including any opportunity costs |
What steps should a manager take when dealing with a production bottleneck?
| a. |
focusing time and resources on alleviating the bottleneck |
|
| b. |
focusing time and resources on elevating the bottleneck |
|
| c. |
focusing time and resources on improving the efficiency of the bottleneck process |
|
| d. |
both b and c |
Homework Answers
Answer- The following items is not subtracted from sales revenue to arrive at contribution margin on a contribution margin income statement= fixed manufacturing overhead.
Explanation- To arrive at contribution margin on a contribution margin income statement only variable expenses will be subtracted from sales revenue.
Answer- A special order will increase net income when = additional revenue from the special order is greater than the additional costs, including any opportunity costs.
Explanation- A special order will increase net income when the additional revenue from the special order is greater than the additional costs of producing the special order, including any opportunity costs.
Answer- The steps should a manager take when dealing with a production bottleneck= both b and c.
Explanation- The following steps a manager should take while dealing with a production bottleneck- 1)- focusing time and resources on elevating the bottleneck.
2)- focusing time and resources on improving the efficiency of the bottleneck process.
Add Answer to:
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Contribution margin
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Profit
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price of $30 per unit. This is a one-time deal (i.e., a short-term
decision). You have enough spare capacity to fulfill this special
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Brockton has a contribution margin ratio of 20%. If the
company's sales revenue is $1,000 greater than their break-even
point in sales dollars, their net income:
Brockton has a contribution margin ratio of 20%. If the company's sales revenue is $1,000 greater than their break-even point in sales dollars, their net income: will be $1,000 another paradox! will be $200 will be $800
Question 1: Special order
Sales volume in units
80
Revenue
$8,000
Variable
costs
$1,600
Contribution margin
$6,400
Fixed costs
$1,300
Profit
$5,100
Special order: A client wants to buy 30 units at a discounted
price of $30 per unit. This is a one-time deal (i.e., a short-term
decision). You have enough spare capacity to fulfill this special
order without cutting back on your regular sales.
a) Use the gross approach to decide whether you should take
the special order:
status...
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Brockton has a contribution margin ratio of 20%. If the
company's sales revenue is $1,000 greater than their break-even
point in sales dollars, their net income:
Brockton has a contribution margin ratio of 20%. If the company's sales revenue is $1,000 greater than their break-even point in sales dollars, their net income: will be $1,000 another paradox! will be $200 will be $800
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