chapter 5 accounting

200

Atlas Corporation sells 100 bicycles during a month at a price of $500 per unit. The variable expenses amount to $300 per bicycle. How much does profit increase if it sells one more bicycle?

12000

Atlas Corporation sells 100 bicycles during a month. The contribution margin per bicycle is $200. The monthly fixed expenses are $8,000. Compute the profit from the sale of 100 bicycles ________.

total revenue equals total costs

Break-even point is the level of sales at which ______.

60%

Cartier Corporation currently sells its products for $50 per unit. The company's variable costs are $20 per unit. Fixed expenses amount to a total of $5,000 per month. What is the company's contribution margin ratio?

40%

Cartier Corporation currently sells its products for $50 per unit. The company's variable costs are $20 per unit. Fixed expenses amount to a total of $5,000 per month. What is the company's variable cost ratio?

55000

If sales increase by $50,000, what will be the net operating income for the company?

unit contribution margin

Once the break-even point has been reached, net operating income will increase by the amount of the _____ for each additional unit sold.

sales minus variable cost

The following explains contribution margin ________.

Operating Leverage

The measure of how sensitive net operating income is to a given percentage change in dollar sales is called _______.

Profit = Unit CM x Q - Fixed Expenses

The profit graph is based on the following linear equation:

total expenses

What does the green line in the CVP graph indicate?

sales volume

What is represented on the X axis of a cost-volume-profit (CVP) graph?

fixed expenses

What is usually plotted as a horizontal line on the CVP graph?