Chapter 5 Cost-Volume-Profit Relationships Learn Smart
Which of the following items are found above the contribution margin on a contribution margin format income statement?
Sales, variable expenses
Contribution margin:
becomes profit after fixed expenses are covered
An income statement constructed under the ________ approach allows users to easily judge the impact of profits of changes in selling price, cost or volume.
contribution margin
Company A's product sells for $90 and has a variable cost of $35 per unit. Fixed costs total $550,000. If Company A sells 16,000 units, the contribution margin per unit is:
$55
Which tool can be used to easily calculate the change in profit resulting from a change in sales price, sales volume, variable costs, or fixed costs?
CVP Analysis
Selling price per unit multiplied by the quantity sold equals total _____.
Sales
The contribution margin is equal to sales minus:
variable expenses
CVP Analysis allows companies to easily identify the change in profit due to changes in
volume, selling price, costs
Vivian's Violins has sales of $326,000, contribution margin of $184,000 and fixed costs total $85,000. Vivian's Violins net operating income is:
$184,000-$85,000=$99,000