A306 Chapter 2

The contribution margin income statement allows users to easily judge the impact of a change in Blank______ on profit. Multiple select question. cost volume selling price organizational structure

cost volume selling price

CVP analysis allows companies to easily identify the change in profit due to changes in: Multiple select question. volume. management. location. costs. selling price.

costs. volume. selling price.

A company with a high ratio of fixed costs: Multiple select question. is more likely to experience greater profits when sales are up than a company with mostly variable costs. will be able to avoid some of the fixed costs when sales decrease by lowering production. will not be concerned about fluctuating sales. is more likely to experience a loss when sales are down than a company with mostly variable costs.

is more likely to experience a loss when sales are down than a company with mostly variable costs. is more likely to experience greater profits when sales are up than a company with mostly variable costs.

CVP analysis focuses on how profits are affected by Blank______. Multiple select question. total fixed costs sales volume mix of products sold unit variable cost break-even point selling price

total fixed costs sales volume mix of products sold unit variable cost selling price

A company has total sales of $1,430,000. Fixed expenses are $657,000 and the contribution margin ratio is 67%. Company profit (loss) is Blank______. Multiple choice question. ($185,100) $773,000 $958,100 $301,100

$301,100

The relative proportions in which a company's products are sold is referred to as

Sales mix

A company reported $100,000 in sales and $80,000 in variable costs at the breakeven point of 200 units. If the company sells 201 units, net profit will be Blank______. Multiple choice question. $200 $500 $100 $400

$100

Anne's Antique Store has a contribution margin ratio of 29%. The break-even point has been reached. If the store generates an additional $600,000 of sales for the year, net operating income will increase by Blank______. Multiple choice question. $600,000 $174,000 $426,000

$174,000

JVL Enterprises has set a target profit of $126,000. The company sells a single product for $50 per unit. Variable costs are $15 per unit and fixed costs total $98,000. How many units does JVL have to sell to BREAK-EVEN? Multiple choice question. 2,800 1,960 6,400 3,600

2,800

If a company with $40,000 of fixed expenses is operating at a loss, each additional unit sold will decrease that loss by the selling price per unit. True false question.TrueFalse

False

Contribution margin: Multiple choice question. is first used to cover variable expenses. becomes profit after fixed expenses are covered. equals sales minus fixed expenses. is not affected by changes in activity.

becomes profit after fixed expenses are covered.

A company currently has sales of $700,000 and a contribution margin ratio of 45%. As a result of increasing advertising expense by $8,000, the company expects to increase sales to $735,000. If this is done and these results occur, net operating income will Blank______. Multiple choice question. decrease by $12,250 decrease by $8,000 increase by $15,750 increase by $7,750

increase by $7,750

The best fitting line minimizes the sum of the squared errors when using Blank______. Multiple choice question. the high-low method least-square regression scattergraph analysis

least-square regression

If the total contribution margin is less than the total fixed expenses, a Blank______ occurs. Multiple choice question. net loss break-even point net profit

net loss

The variable expense ratio equals variable expenses divided by Blank______. Multiple choice question. sales net income fixed expenses contribution margin

sales