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?