Homework Answers
The correct answer is:-
a) Create an increase or decrease in net profits depending on what happens with variable and fixed costs.
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An increase in sales volume will: O Create an increase or decrease in net profits depending...
Net Income Increase (Decrease) Continue Eliminate $ $ $ Sales Variable costs Cost of goods sold Operating expenses Tota...
Net Income Increase (Decrease) Continue Eliminate $ $ $ Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed $ $ $ Net income (loss) tA tA Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's six divisions. Veronica made the following presentation to Dunn's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is...
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...
SimmonsSimmons Company has recently become aware of the large total discounts on its orders and would...
SimmonsSimmons Company has recently become aware of the large total discounts on its orders and would like to know the impact on profit. The company computed its operating profit as follows: Net sales after discounts $130,000 Variable costs 60,000 Contribution margin $70,000 Fixed costs 5,000 Operating profit $65,000 Requirements (a) Suppose SimmonsSimmons could reduce its sales discounts to produce a 3030% increase in net revenues but no changes in variable or fixed costs. By what percent would operating profits increase?...
QUESTION 27 When sales dollars increase, the net income of a company with a high degree...
QUESTION 27 When sales dollars increase, the net income of a company with a high degree of operating leverage will increase more quickly than in a company with a lower operating leverage. However, when sales dollars decrease, the net income of a company with a high degree of operating leverage will decrease more quickly than in a company with a lower operating leverage. True O False QUESTION 28 Jen & Berry's currently sells 100,000 pints of ice cream per month...
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 are true in a cost-volume-profit graph: An increase in the unit selling...
Which of the following are true in a cost-volume-profit graph: An increase in the unit selling price would shift the break even sales point to the left An increase in unit variable costs would decrease the slope of the total costs line An increase in the unit selling price would shift the break-even sales point to the right All of the answers are correct QUESTION 4 Watson Company sells its product for $10 a unit. Next year, fixed expenses are...
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
Use the following contribution margin statement for 20X9: 20X9 Sales volume (#units) 100 Revenue $7,500 Variable...
Use the following contribution margin statement for 20X9: 20X9 Sales volume (#units) 100 Revenue $7,500 Variable costs $4,500 Contribution margin $3,000 Fixed costs $1,800 Profit $1,200 Required: a) How much is the price per unit, unit variable cost and unit contribution margin? price= unit VC= unit CM= b) Write down the CVP relation: profit as a function of sales volume in units (fill in the missing numbers in an equation like: Profit = 2 *Volume - 50). Profit = *Volume -...
Exercise 5-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (LO5-4] [The following information...
Exercise 5-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (LO5-4] [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Percent Per Unit of Sales $ 90 100% 63 $ 27 308 70 Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. Exercise 5-5 Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if...
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 break-even point to...
Net Income Increase (Decrease) Continue Eliminate $ $ $ Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed $ $ $ Net income (loss) tA tA Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's six divisions. Veronica made the following presentation to Dunn's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is...
QUESTION 27 When sales dollars increase, the net income of a company with a high degree of operating leverage will increase more quickly than in a company with a lower operating leverage. However, when sales dollars decrease, the net income of a company with a high degree of operating leverage will decrease more quickly than in a company with a lower operating leverage. True O False QUESTION 28 Jen & Berry's currently sells 100,000 pints of ice cream per month...
Which of the following are true in a cost-volume-profit graph: An increase in the unit selling price would shift the break even sales point to the left An increase in unit variable costs would decrease the slope of the total costs line An increase in the unit selling price would shift the break-even sales point to the right All of the answers are correct QUESTION 4 Watson Company sells its product for $10 a unit. Next year, fixed expenses are...
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
Exercise 5-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (LO5-4] [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Percent Per Unit of Sales $ 90 100% 63 $ 27 308 70 Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. Exercise 5-5 Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if...
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 break-even point to...
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