Homework Answers
Correct answer------------If sales decrease, net income will decrease by the decrease in the number of units sold times the contribution margin per unit.
.
If the company is at breakeven there are zero profit. If sales increase then profit increase too but the % of increase in profit depends on operating leverage. The reduction in fixed cost and reduction in variable cost will also increase net profit.
The increase in variable cost will decrease net income.
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If a company is currently operating at its breakeven point, which of the following statements is...
Example 48: Fill in the effects of each of the following on breakeven point, operating income...
Example 48: Fill in the effects of each of the following on breakeven point, operating income and net income using: 1 = increase, D = Decrease, NC = No Change. Breakeven point in units Net Income Breakeven point in dollars Operating Income Contribution Margin in dollars Contribution Margin Ratio Increase variable costs per unit Decrease variable costs per unit Increase variable costs in total Decrease variable costs in total Increase fixed costs Decrease fixed costs Increase selling price Decrease selling...
Example 23: Fill in the effects of each of the following on breakeven point, operating income and...
Example 23: Fill in the effects of each of the following on breakeven point, operating income and net income using: I = increase, D = Decrease, NC = No Change. Breakeven point Operating Income Net Income Contribution Margin Increase variable costs per unit Decrease variable costs per unit Increase variable costs in total Decrease variable costs in total Increase fixed costs Decrease fixed costs Increase selling price Decrease selling price Increase units sold Decrease units sold Increase tax rate Decrease tax rate
please answer all 4 multiple choice questions A responsibility center in which a manager is responsible...
please answer all 4 multiple choice questions
A responsibility center in which a manager is responsible for revenues, cost, and investment is an) cost center. revenue center profit center. investment center None of these. If the accounts receivable turnover is 42 days, what is the account receivable turnover ratio (assuming a 365 day year)? 7.14 times 8.69 times 4.52 times None of these When 10,000 units are produced, variable costs are $6 per unit. Therefore, when 20,000 units are produced:...
The following income statements are provided for two companies operating in the same industry: Revenue Variable...
The following income statements are provided for two companies operating in the same industry: Revenue Variable costs Contribution margin Fixed costs Net income Felix Company $210,000 (37,800) 172,200 (80,934) $ 91,266 Jinx Company $210,000 (80,934) 129,066 (37,800) $ 91,266 Assuming sales increase by $1,050, select the correct statement from the following: Multiple Choice Felix's net income will be more than Jinx's Only Fell wil experience an increase in profit Felly's net income will increase by $250. Multiple Choice Felix's net...
The following CVP income statements are available for Blanc Company and Noir Company. Blanc Company Noir...
The following CVP income statements are available for Blanc
Company and Noir Company.
Blanc Company
Noir Company
Sales
$470,000
$470,000
Variable costs
282,000
235,000
Contribution margin
188,000
235,000
Fixed costs
169,200
216,200
Net income
$18,800
$18,800
Calculate Contribution margin ratio. (Round answers to
2 decimal places, e.g. 0.32.)
Contribution Margin Ratio
Blanc Company
Noir Company
Compute the break-even point in dollars for each company.
(Round answers to 0 decimal places, e.g.
5,125.)
Break-even Point
Blanc Company
$
Noir Company
$...
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.
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
Which of the following is an assumption underlying standard CVP analysis? Multiple Choice The price of...
Which of the following is an assumption underlying standard CVP analysis? Multiple Choice The price of a product or service is expected to change as volume changes. 0 Fixed expenses will change as volume increases. In multiproduct companies, the sales mix is constant. С C In manufacturing companies, inventories always change. If sales volume increases and all other factors remain constant, then the: Multiple Choice net operating income will decrease. O margin of safety will increase. contribution margin ratio will...
A company has calculated its indifference point to be 100.000 units for deciding on whether to...
A company has calculated its indifference point to be 100.000 units for deciding on whether to automate its manufacturing process. What will happen to profits of the company does automate and sales volume is only 90,000 units? Multiple Choice O Protes remain the same Westerwheat, Inc. has provided the following cost information. WESTERWHEAT Contribution Margin Income Statement 150,eee units sold Total Per Unit Sales revenue $1,950, eee $13.ee Less: Variable costs 1.200, Contribution margin $ 75e, eee $ 5.0 Less:...
Saved Which of the following statements is true with respect to the degree of operating leverage...
Saved Which of the following statements is true with respect to the degree of operating leverage (DOL)? 8 Multiple Choice It is calculated as the ratio of contribution margin (CM) to operating Income, at each level of output For most firms, it is relatively constantin ount as sales volume changes. It provides a simple way to estimate the change in total fixed cost for a given change in sales volume. It is calculated as the amount of operating income where...
Example 48: Fill in the effects of each of the following on breakeven point, operating income and net income using: 1 = increase, D = Decrease, NC = No Change. Breakeven point in units Net Income Breakeven point in dollars Operating Income Contribution Margin in dollars Contribution Margin Ratio Increase variable costs per unit Decrease variable costs per unit Increase variable costs in total Decrease variable costs in total Increase fixed costs Decrease fixed costs Increase selling price Decrease selling...
please answer all 4 multiple choice questions
A responsibility center in which a manager is responsible for revenues, cost, and investment is an) cost center. revenue center profit center. investment center None of these. If the accounts receivable turnover is 42 days, what is the account receivable turnover ratio (assuming a 365 day year)? 7.14 times 8.69 times 4.52 times None of these When 10,000 units are produced, variable costs are $6 per unit. Therefore, when 20,000 units are produced:...
The following income statements are provided for two companies operating in the same industry: Revenue Variable costs Contribution margin Fixed costs Net income Felix Company $210,000 (37,800) 172,200 (80,934) $ 91,266 Jinx Company $210,000 (80,934) 129,066 (37,800) $ 91,266 Assuming sales increase by $1,050, select the correct statement from the following: Multiple Choice Felix's net income will be more than Jinx's Only Fell wil experience an increase in profit Felly's net income will increase by $250. Multiple Choice Felix's net...
The following CVP income statements are available for Blanc
Company and Noir Company.
Blanc Company
Noir Company
Sales
$470,000
$470,000
Variable costs
282,000
235,000
Contribution margin
188,000
235,000
Fixed costs
169,200
216,200
Net income
$18,800
$18,800
Calculate Contribution margin ratio. (Round answers to
2 decimal places, e.g. 0.32.)
Contribution Margin Ratio
Blanc Company
Noir Company
Compute the break-even point in dollars for each company.
(Round answers to 0 decimal places, e.g.
5,125.)
Break-even Point
Blanc Company
$
Noir Company
$...
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
Which of the following is an assumption underlying standard CVP analysis? Multiple Choice The price of a product or service is expected to change as volume changes. 0 Fixed expenses will change as volume increases. In multiproduct companies, the sales mix is constant. С C In manufacturing companies, inventories always change. If sales volume increases and all other factors remain constant, then the: Multiple Choice net operating income will decrease. O margin of safety will increase. contribution margin ratio will...
A company has calculated its indifference point to be 100.000 units for deciding on whether to automate its manufacturing process. What will happen to profits of the company does automate and sales volume is only 90,000 units? Multiple Choice O Protes remain the same Westerwheat, Inc. has provided the following cost information. WESTERWHEAT Contribution Margin Income Statement 150,eee units sold Total Per Unit Sales revenue $1,950, eee $13.ee Less: Variable costs 1.200, Contribution margin $ 75e, eee $ 5.0 Less:...
Saved Which of the following statements is true with respect to the degree of operating leverage (DOL)? 8 Multiple Choice It is calculated as the ratio of contribution margin (CM) to operating Income, at each level of output For most firms, it is relatively constantin ount as sales volume changes. It provides a simple way to estimate the change in total fixed cost for a given change in sales volume. It is calculated as the amount of operating income where...
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