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.