Homework Answers
1)
In multi product companies the sales mix is costant is and assumption of CVP analysis.
3rd option
2)
If sales increases and all the other components remains constant the margin of safety will increase.
2nd Option
3)
If sales and variable cost increases by same amount, it will have no impact on Breakeven volume.
2nd option
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Which of the following is an assumption underlying standard CVP analysis? Multiple Choice The price of...
Base CVP Scenario - Base ALL OTHER Calculations from this set of numbers! Total Per unit...
Base CVP Scenario - Base ALL OTHER Calculations from this set of numbers! Total Per unit Ratio % Sales (20,000 ) $800,000 $40.00 100.00% Variable expenses 500,000 25.00 62.50% Contribution margin 300,000 $15.00 37.50% Fixed expenses 125,000 Net operating income $175,000 (A) Determine the break-even point in sales units Break Even (Units) Formula = ______________ (B) Sales volume increases by 60% and the selling price decreases by $6.00...
Which of the following is an assumption that is NOT made in most cost-volume-profit calculations? Multiple...
Which of the following is an assumption that is NOT made in most cost-volume-profit calculations? Multiple Choice The selling price is constant. Selling price, variable expense per unit, and fixed expense per unit do not change throughout the relevant range. In a multiproduct company, the sales mix does not chang There is no change in inventory levels
Mossfeet Shoe Corporation is a single product firm. The company is predicting that a price increase...
Mossfeet Shoe Corporation is a single product firm. The company is predicting that a price increase next year will not cause unit sales to decrease. What effect would this price increase have on the following items for next year? A) Contribution Margin Ratio Increase Decrease Increase Decrease Break-even Point Decrease Decrease No effect No effect c) D) Multiple Choice choice A Choice B Oo oo Choice
AC 204 - Introduction to Accounting II Chapter 5: Cost-Volume-Profit (CVP) Analysis CEG Ski Corporation Total...
AC 204 - Introduction to Accounting II Chapter 5: Cost-Volume-Profit (CVP) Analysis CEG Ski Corporation Total Per unit Sales 330,000 $ 550 $ Units sold = 600 Variable expenses 165,000 275 Contribution margin 165,000 $ 275 $ Fixed expenses 75,000 Net operating income 90,000 $ FOR EACH SITUATION, YOU NEED TO EVALUATE HOW THE CHANGES AFFECT CONTRIBUTION MARGIN AND HOW THE CHANGES AFFECT FIXED EXPENSES. Also, increase in fixed costs = decrease to income; decrease in fixed costs = increase...
Problem4. CVP analysis Marjolein & Co. distributes a designer alarm clock that sells for $25.00 per...
Problem4. CVP analysis Marjolein & Co. distributes a designer alarm clock that sells for $25.00 per unit. Variable costs are S9.00 per unit, and fixed costs total $1,800,000 per year Required Answer the following independent questions What is the product's CM ratio? Use the CM ratio to determine the break-even point in sales dollars. 2. Due to an increase in demand, the company estimates that sales will increase by S300,000 during the next year. By how much should net operating...
Excel SIM: CVP Analysis 1. Determine the break-even point. 2. Compute the margin of safety and...
Excel SIM: CVP Analysis 1. Determine the break-even point. 2. Compute the margin of safety and explain its significance 3. Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income. 35 CVP Analysis Excel FORMULAS DATA INSERT PAGE LAYOUT REVIEW Sign In A Alignment Number Edang Conditional Formatas Cell Formatting Table Styles Styles Given the following information complete a CVP analysis Given the following...
Problem 8-1 Performing Basic CVP Analysis (LO1 - CC4; LO2 - CC6, 7, 10) Stratford Company...
Problem 8-1 Performing Basic CVP Analysis (LO1 - CC4; LO2 - CC6,
7, 10)
Stratford Company distributes a lightweight lawn chair that sells for $40 per unit. Variable expenses are $16 per unit, and fixed expenses total $672,000 annually Required: Answer the following independent questions: 1. What is the product's CM ratio? tion margin ratio 2. Use the CM ratio to determine the break-even point in sales dollars. k-even point in sales dollars 3. The company estimates that sales will...
Problem 6-23 CVP Applications; Contribution Margin Ratio: Degree of Operating Leverage (LO6-1, LO6- 3, LO6-4, LO6-5,...
Problem 6-23 CVP Applications; Contribution Margin Ratio: Degree of Operating Leverage (LO6-1, LO6- 3, LO6-4, LO6-5, LO6-8) Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $40 per unit. Variable expenses are $20.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income $1,040,000 520,000 520,000 180,000 $ 340,000 Required: Answer each question independently based on the original data: 1....
QUESTION 7 Which of the following statements is correct with regard to a CVP (Cost, Volume,...
QUESTION 7 Which of the following statements is correct with regard to a CVP (Cost, Volume, Profit) graph? 1.A CVP graph shows the maximum possible profit. 2.A CVP graph shows the break-even point as the intersection of the total sales revenue line and the total expense line 3.A CVP graph assumes that total expense varies in direct proportion to unit sales. 4.A CVP graph shows the operating leverage as the gap between total sales revenue and total expense at the...
Problem 2-20 Points: The CGC Computer Products most recent contribution margin income statement is shown on...
Problem 2-20 Points: The CGC Computer Products most recent contribution margin income statement is shown on the worksheet. In each of the following scenarios, calculate the values indicated. (CALCULATE ALL CHANGES FROM THE BEGINNING SCENARO OF NUMBERS-hint: it may be easier to copy the base income statement and paste to all other scenarios) A. The breakeven point in dollars and units. B. The sales volume increases by 30% and the price decreases by $0.50 per unit. c. The selling price...
Which of the following is an assumption that is NOT made in most cost-volume-profit calculations? Multiple Choice The selling price is constant. Selling price, variable expense per unit, and fixed expense per unit do not change throughout the relevant range. In a multiproduct company, the sales mix does not chang There is no change in inventory levels
Mossfeet Shoe Corporation is a single product firm. The company is predicting that a price increase next year will not cause unit sales to decrease. What effect would this price increase have on the following items for next year? A) Contribution Margin Ratio Increase Decrease Increase Decrease Break-even Point Decrease Decrease No effect No effect c) D) Multiple Choice choice A Choice B Oo oo Choice
Problem4. CVP analysis Marjolein & Co. distributes a designer alarm clock that sells for $25.00 per unit. Variable costs are S9.00 per unit, and fixed costs total $1,800,000 per year Required Answer the following independent questions What is the product's CM ratio? Use the CM ratio to determine the break-even point in sales dollars. 2. Due to an increase in demand, the company estimates that sales will increase by S300,000 during the next year. By how much should net operating...
Excel SIM: CVP Analysis 1. Determine the break-even point. 2. Compute the margin of safety and explain its significance 3. Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income. 35 CVP Analysis Excel FORMULAS DATA INSERT PAGE LAYOUT REVIEW Sign In A Alignment Number Edang Conditional Formatas Cell Formatting Table Styles Styles Given the following information complete a CVP analysis Given the following...
Problem 8-1 Performing Basic CVP Analysis (LO1 - CC4; LO2 - CC6,
7, 10)
Stratford Company distributes a lightweight lawn chair that sells for $40 per unit. Variable expenses are $16 per unit, and fixed expenses total $672,000 annually Required: Answer the following independent questions: 1. What is the product's CM ratio? tion margin ratio 2. Use the CM ratio to determine the break-even point in sales dollars. k-even point in sales dollars 3. The company estimates that sales will...
Problem 6-23 CVP Applications; Contribution Margin Ratio: Degree of Operating Leverage (LO6-1, LO6- 3, LO6-4, LO6-5, LO6-8) Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $40 per unit. Variable expenses are $20.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income $1,040,000 520,000 520,000 180,000 $ 340,000 Required: Answer each question independently based on the original data: 1....
QUESTION 7 Which of the following statements is correct with regard to a CVP (Cost, Volume, Profit) graph? 1.A CVP graph shows the maximum possible profit. 2.A CVP graph shows the break-even point as the intersection of the total sales revenue line and the total expense line 3.A CVP graph assumes that total expense varies in direct proportion to unit sales. 4.A CVP graph shows the operating leverage as the gap between total sales revenue and total expense at the...
Problem 2-20 Points: The CGC Computer Products most recent contribution margin income statement is shown on the worksheet. In each of the following scenarios, calculate the values indicated. (CALCULATE ALL CHANGES FROM THE BEGINNING SCENARO OF NUMBERS-hint: it may be easier to copy the base income statement and paste to all other scenarios) A. The breakeven point in dollars and units. B. The sales volume increases by 30% and the price decreases by $0.50 per unit. c. The selling price...
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