Accounting 202 exam #2

When a company sells one unit above the number required to break-even, the company's net operating income will

change from zero to a net operating profit

After reaching the break-even point, a company's net operating income will increase by the --- --- per unit

contribution margin

Total contribution margin equals ______.

fixed expenses plus net operating income

net operating income equals

(unit sales - unit sales to break even) x unit contribution margin

According to the CVP analysis model and assuming all else remains the same, profits would be increased by a(n):

decrease in the unit variable cost.

Once the break-even point is reached, the sale of an additional unit increases contribution margin by an amount that is ______ the increase in net operating income.

equal to

If the total contribution margin is less than the total fixed expenses, a ______ occurs.

net loss

Company A has sales of $500,000, variable costs of $350,000, and fixed costs of $150,000. Company A has ______.

reached the break-even point a contribution margin equal to fixed costs

CVP analysis focuses on how profits are affected by ______.

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

Which of the following items are found above the contribution margin on a contribution margin format income statement?

sales, variable expense

contribution margin income statement

sales, variable expense, contribution margin, fixed expense, net operating income

Pete's Putters sells each putter for $125. The variable cost is $60 per putter and fixed costs total $400,000. Based on this information

the sale of 12,000 putters results in net operating income of $380,000 the contribution margin per putter is $65.

The break-even point is reached when the contribution margin is equal to:

total fixed expenses.