Accounting midterm 1

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The following information was drawn from the accounting records of Dark Night, Inc Sales Revenue (250 @ $600 per unit)$150,000 Cost of Goods Sold: Variable (250 @ $300 per unit) (75,000)Gross Margin 75,000 Sales Commissions (250 @ $20) (5,000)Fixed Period Expenses (9,000)Net Income$61,000

$70,000.

Green Manufacturing Company produces a product that has a variable cost of $30 per unit. Fixed costs amount to $240,000. The selling price of the product is $36. How many units of product must Green produce and sell to break even?

40,000 units

At a sales level of $270,000, the magnitude of operating leverage for Donuts Unlimited is 2.8. If number of units sold increase by 15%, profits will increase by:

42%

Thornton Entertainment sponsors rock concerts. The company is considering a contract to hire a band at a cost of $55,000 per concert. Required What are the total band cost and the cost per person if concert attendance is 5,000, 5,500, 6,000, 6,500, or 7,000? Is the cost of hiring the band a fixed or a variable cost?

55k, fixed

Unistar Computers makes and sells a unique computer that is designed for a specific market. Cost information relating to that product is shown below: Sales price$1,500per unitVariable costs$ 1,000per unitFixed costs$120,000total Unistar expects to make and sell 300 computers. Based on this information, the margin of safety expressed in units is:

60 units.

Green Manufacturing Company produces a product that has a variable cost of $30 per unit. Fixed costs amount to $240,000. The selling price of the product is $36. How many units of product would Green be required to sell in order to earn a desired profit of $180,000?

70,000 units

Select the true statement: As volume increases variable cost per unit decreases. As volume increases fixed cost per unit remains constant. As volume increases variable cost per unit increases. As volume decreases fixed cost per unit increases.

As volume decreases fixed cost per unit increases.

The cost of denim used to manufacture blue jeans would most likely be classified as a indirect material direct labor direct material manufacturing overhead

direct material

The costs incurred to sell a product would be classified as upstream costs midstream costs downstream costs none of the above

downstream costs

where does depreciation of office equipment go?

expensed

All other things being equal, decreasing fixed cost will increase the number of units that must be sold to earn a desired profit. This statement is

false

Managerial accounting focuses on the needs of external users while financial accounting focuses on the needs of internal users. This statement is

false

Within the context of a just-in-time inventory system, the cost of missing a sale because of an insufficient amount of inventory is commonly called waste. This statement is

false

The Financial Accounting Standards Board (FASB) establishes standards for the preparation of financial accounting reports while the Securities and Exchange Commission (SEC) establishes standards for the preparation of managerial accounting reports. This statement is t or f

false.

The graph below depicts Dove Company's monthly warehouse rental cost. Based on the graph, the rental cost is a

fixed cost.

In a manufacturing firm, costs incurred to research a more fuel efficient engine would be classified as upstream costs midstream costs downstream costs both midstream and downstream costs

upstream costs

Clipper Company sells two types of nail clippers. One focuses on the economy oriented customer and the other aims to satisfy the high-end clientele. The economy clipper cost $3 and has a sales price of $5. The high-end model costs $9 and sells for $12. Fixed costs associated with this product line amount to $35,880. Economy clippers constitute 70 percent of the market with the remaining 30 percent being high-end clippers. Based on this information what is the weighted average contribution margin? $2.80 $1.80 $2.30 $1.00

$2.30

At a production and sales level of 3,000 units, Bastion Company incurred $60,000 of fixed cost and $36,000 of variable cost. When 4,000 units of product are produced and sold the company's cost per unit is: $32. $29. $27. $24.

$27.

Brock Company makes candy. During the most recent accounting period Brock paid $4,750 for raw materials, $5,750 for labor, and $5,500 for overhead costs that were incurred to make candy. Brock started and completed 16,495 units of candy of which 11,500 were sold. Based on this information the balance in the inventory account on Brock's balance sheet would be (Do not round intermediate calculations.)

$4,845.

Celestin Manufacturing Company incurred $12,000 of depreciation on its manufacturing equipment during its first year of operation. During this year the company made 6,000 units of product and sold 2,700 units of product. Based on this information alone the company would show

$5,400 of cost of goods sold expense on its income statement.

components of product cost

1. Materials to make product 2. Labor 3. Overhead (utilities, equipment) 4. Storage of product

Malone Company produces a product that has a variable cost of $30 per unit and a sales price of $70 per unit. The company's annual fixed costs total $820,000. It had net income of $380,000 in the previous year. In an effort to increase the company's market share, management is considering lowering the selling price to $60 per unit. Required If Malone desires to maintain net income of $380,000, how many additional units must it sell to justify the price decline? Assume that in addition to lowering its selling price to $60, Malone also desires to increase its net income by $87,000. Determine the number of units the company must sell to earn the desired income.

10,000 units 42900 sold units

Clipper Company sells two types of nail clippers. One focuses on the economy oriented customer and the other aims to satisfy the high-end clientele. The economy clipper costs $5 and has a sales price of $9. The high-end model costs $9 and sells for $15. Fixed costs associated with this product line amount to $35,880. Economy clippers constitute 70 percent of the market with the remaining 30 percent being high-end clippers. Based on this information what is the total number of clippers that must be sold to earn a $12,420 profit? 10,500 clippers 7,350 clippers 3,150 clippers None of the answers are correct.

10,500 clippers

Brock Company makes candy. During the most recent accounting period Brock paid $4,750 for raw materials, $5,750 for labor, and $5,500 for overhead costs that were incurred to make candy. Brock started and completed 16,495 units of candy of which 11,500 were sold. Based on this information Brock would recognize which of the following amounts of expense on its income statement?

11,155

Boland Company sells a product that is priced at $20 per unit. The per unit contribution margin is equal to 25 percent of the sales price. If fixed cost amount to $55,000 and the company has a desired profit of $20,000, the number of units that must be sold to earn the desired profit is

15,000 units.

Clipper Company sells two types of nail clippers. One focuses on the economy oriented customer and the other aims to satisfy the high-end clientele. The economy clipper costs $3 and has a sales price of $5. The high-end model costs $9 and sells for $12. Fixed costs associated with this product line amount to $35,880. Economy clippers constitute 70 percent of the market with the remaining 30 percent being high-end clippers. Based on this information what is the total break-even point (the total number of economy line plus the number of high-end clippers)? 3,120 clippers 15,460 clippers 2,340 clippers 15,600 clippers

15,600 clippers

Clipper Company sells two types of nail clippers. One focuses on the economy oriented customer and the other aims to satisfy the high-end clientele. The economy clipper costs $5 and has a sales price of $9. The high-end model costs $9 and sells for $15. Fixed costs associated with this product line amount to $35,880. Economy clippers constitute 70 percent of the market with the remaining 30 percent being high-end clippers. Based on this information what is the break-even point for the high-end clippers? 3,120 clippers 5,460 clippers 2,340 clippers 7,800 clippers

2,340 clippers

Tutor, Inc. (TI) provides instructional services to its customers. TI charges $200 per student. The Company expects to serve 500 students during the coming year. All of the Company's expenses are fixed. Total annual fixed cost are projected to be $60,000. If the estimated number of students increase by 10%, net income will increase by: 30%. 20%. 10%. 25%.

25%.

Derek's Drum Depot (DDD) wants to add a new line of drumsticks to its product line. The following data apply to the new drumsticks line. Budgeted sales 30,000sets per yearSales price$5per setVariable costs$3per setFixed costs$10,000per year The margin of safety for DDD is:

83%

Which of the following statement is true? A company that has only variable cost cannot benefit from operating leverage. Correct Operating leverage refers to a company's ability to increase its sales volume while decreasing its total fixed cost. Operating leverage may help a company increase its profitability but it cannot decrease profitability. To benefit from operating leverage a company must have both fixed and variable costs.

A company that has only variable cost cannot benefit from operating leverage.

Which of the following statements is true? The risk of volatile changes in net income is not affected by a company's cost structure (fixed or variable). A fixed cost structure has less risk of volatile changes in net income than a company with a variable cost structure. A mixed cost structure (part fixed and part variable) has the least risk of volatile changes in net income. A fixed cost structure has more risk of volatile changes in net income than a company with a variable cost structure.

A fixed cost structure has more risk of volatile changes in net income than a company with a variable cost structure.

Which of the following is normally not included in a break-even graph? A fixed cost line. A variable cost line. A total cost line. A total revenue line.

A variable cost line.

The primary difference between cost classification for a manufacturing firm versus a merchandising firm is All costs for a merchandising firm are downstream costs for a manufacturing firm. All downstream costs for a merchandising firm are midstream costs for a manufacturing firm. All midstream costs for a merchandising firm are upstream cost for a manufacturing firm. All costs for a manufacturing firm are midstream costs for a merchandising firm.

All costs for a manufacturing firm are midstream costs for a merchandising firm.

Due to competition Simmons company is forced to lower its target sales price. To maintain its current profit, Simmons' could reduce its variable cost per unit. increase the number of units it sells. reduce its total fixed cost. All of the answers could enable the Company to maintain profit while reducing the sales price per unit.

All of the answers could enable the Company to maintain profit while reducing the sales price per unit.

Which of the following are characteristics of managerial accounting information? Provides information to the company's management team. Is future oriented. Is more willing to sacrifice reliability to gain relevance than is financial accounting. All of the answers describe characteristics of managerial accounting information.

All of the answers describe characteristics of managerial accounting information.

Which of the following is a requirement of the Sarbanes-Oxley Act? The establishment of a strong set of internal controls. The establishment of a code of ethics. The establishment of a hotline for whistle blowers. All of the choices are requirements included in the Sarbanes-Oxley Act.

All of the choices are requirements included in the Sarbanes-Oxley Act.

The cost of a small amount of glue used to manufacture a product may be called an overhead cost. a product cost. an indirect cost. All of the choices are terms that may be used to describe small quantities of materials consumed in the process of making products.

All of the choices are terms that may be used to describe small quantities of materials consumed in the process of making products.

Which of the following is an appropriate span of time for determining the average cost of providing a ski lessons to customers.

All of the choices could be an appropriate span of time necessary for determining the average cost.

Which of the following formulas is used to determine the margin of safety? Budgeted sales in units - Break-even sales in units. Budgeted sales in dollars - Break-even sales in dollars. (Budgeted sales in units - Break-even sales in units) ÷ Budgeted sales in units. All of the formulas will yield a measure of the margin of safety.

All of the formulas will yield a measure of the margin of safety.

Which of the following statements is false? The high/low method is the most accurate method of estimating fixed and variable cost. A visual scatter graph is more precise than regression analysis when drawing a line that best fits a data set. The R Square produced in regression analysis represents the estimated variable cost per unit. All of the statements are false.

All of the statements are false.

Which of the following statements regarding scatter graphs is true? Scatter graph analysis may rely on visual judgment to draw a line that follows a linear path through the plotted points in a data set. Scatter graph analysis may be used to assess the accuracy of the high/low method of estimating fixed and variable costs. Scatter graph analysis may be used in conjunction with the high/low method, and regression analysis as means of estimating variable and fixed costs. All of the statements regarding scatter graphs are true.

All of the statements regarding scatter graphs are true.

The magnitude of operating leverage can be determined by which of the following formulas? Net income ÷ Contribution margin Gross margin ÷ Net income Contribution margin ÷ Net income Net income ÷ Gross margin.

Contribution margin ÷ Net income

Which of the following describes the flow of product costs in a manufacturing company? Correct Product costs are first accumulated in an expense account (Cost of Goods Sold) and then transferred to an asset account (Inventory) When the goods are sold. Product costs are recorded in an expense account (Cost of Goods Sold) as the goods are being manufactured. Product costs are never expensed.

Correct

Elegant Dogs and Dazzling Dogs are competing canine grooming salons. Each company currently serves 4,500 customers per year. Both companies charge $35 to groom a dog. Elegant Dogs pays its dog groomers fixed salaries. Salary expense totals $45,000 per year. Dazzling Dogs pays its groomers $10 per dog groomed. Elegant Dogs lures 2,000 customers from Dazzling Dogs by lowering its grooming price to $25. Dazzling Dogs maintains its $35 price. Which of the following is true? Profits at both companies will decrease. Dazzling Dogs' profits will decrease by more than Elegant Dogs' profits will increase. Dazzling Dogs will suffer a net loss. Elegant Dogs' profits will increase by more than Dazzling Dogs' profits will decrease.

Dazzling Dogs' profits will decrease by more than Elegant Dogs' profits will increase.

In a typical break-even graph Dollars are shown on the horizontal axis. Volume is shown on the vertical axis. Dollars are shown on the vertical axis. Dollars and volume is shown on the vertical axis.

Dollars are shown on the vertical axis.

Which of the following branches of accounting focuses more on historical data? Managerial accounting. Financial accounting.

Financial accounting.

Finch Camps, Inc. leases the land on which it builds camp sites. Finch is considering opening a new site on land that requires $3,300 of rental payment per month. The variable cost of providing service is expected to be $5 per camper. The following chart shows the number of campers Finch expects for the first year of operation of the new site: Jan.390 Feb380 Mar390 Apr.410 May730 June650 July790 Aug800 Sept490 Oct520 Nov590 Dec.460 Total6,600

Fixed rent cost per camper =$3,300 × 12= $66,600 Price = Fixed cost (rent) per camper + Variable cost per camper + $9Price = $6 + $5 + $9Price = $20

Fran Company is currently operating profitably. The company has a fixed cost structure. Based on this information which of the following statements is true? If volume increases by 20%, profitability will increase by less than 20%. If volume increases by 20%, profitability will increase by more than 20%. If volume increases by 20%, profitability will increase by 20%. If volume increases by 20%, profitability will decrease by 20%.

If volume increases by 20%, profitability will increase by more than 20%.

Which of the following costs would not be included as part of manufacturing overhead? Insurance on sales vehicles Depreciation of production equipment Lubricants for production equipment Maintenance workers' salaries at the factory

Insurance on sales vehicles

Product costs are placed in which financial statement account when incurred? Cost of goods sold Inventory Selling expense Property, plant, and equipment

Inventory

The primary difference between midstream costs incurred at a manufacturing firm versus a service firm is Inventory at a service company can be stored for future use as opposed to being immediately consumed at a manufacturing firm. Costs that would ordinarily be classified as upstream in a manufacturing firm would be classified as downstream in a service firm. Inventory at a service company is consumed immediately as opposed to being stored for future use at a manufacturing firm. Costs that would ordinarily be classified as upstream in a service firm would be classified as downstream in a manufacturing firm.

Inventory at a service company is consumed immediately as opposed to being stored for future use at a manufacturing firm.

Which of the following statements is true? Managerial accounting standards are established by the federal government. Managerial accounting data are prepared for external users. Managerial accounting reports are less regulated than financial accounting reports. Managerial accounting is characterized by its objectivity, reliability, consistency and historical nature.

Managerial accounting reports are less regulated than financial accounting reports.

· Product cost vs period cost

Product: Asset goes into inventory (materials, labor, overhead), COGS on income statement, product not sold goes into ending inventory Depreciation on manufacturing equipment Period: Expense (on income statement) like salaries, rent Depreciation on office furniture

Para Company developed a data set that contained a measure of total cost at various levels of activity. Para then used regression analysis to determine the intercept an slope of a line running through the data set. Based on this information, which of the following statements is true regarding the estimates related to the intercept and the slope. The intercept represents the variable cost per unit and the slope represents the fixed cost per unit. The intercept represents the total variable cost and the slope represents the fixed cost per unit. The intercept represents the total fixed cost and the slope represents the variable cost per unit. The intercept represents the total variable cost and the slope represents the total fixed cost per unit.

The intercept represents the total fixed cost and the slope represents the variable cost per unit.

The margin of safety is a measure of the distance between budgeted sales and the break-even point. It can be measured in dollars, in units or as a percentage. These statements are true. These statements are false. Statement one is true and statement two is false. Statement one is false and statement two is true.

These statements are true.

Bradley Company sells a product that has variable costs of $50 each and a sales price $75 each. Bradley has fixed costs of $100,000 and a desired profit of $25,000. If the Company is able to reduce its variable cost per unit to $35 while holding all other items constant, the number of units that must be sold to earn the desired profit will increase by 1,875 units. decrease by 1,875 units. increase by 3,125 units. decrease by 3,125 units.

decrease by 1,875 units.

Tutor, Inc. (TI) provides instructional services to its customers. TI charges $200 per student. The Company expects to serve 500 students during the coming year. All of the Company's expenses are fixed. Total annual fixed cost are projected to be $60,000. If the estimated number of students decreases by 10%, net income will decrease by 10%. increase by 25%. increase by 10%. decrease by 25%.

decrease by 25%.

Kitts Co. buys and sells a product that has a variable cost per unit of $18. Kitts' fixed costs amount to $40,000 and a desired profit of $8,000. The product sells for $22 each. If Kitts is able to reduce fixed costs by $12,000, the number of units that must be sold to earn the desired profit will increase by 12,000. decrease by 9,000. decrease by 3,000. increase by 9,000.

decrease by 3,000.

All other things being equal, if Calpo Company increases its sales price per unit, the number of units necessary to reach the break-even point will increase or decrease

decrease.

The cost of manufacturing a product includes all of the following except materials. labor. advertising. overhead.

advertising.

Just-in-time inventory systems are designed to minimize the cost of waste. opportunity cost. the cost of storage space. all costs identified in the choices provided in this problem.

all costs identified in the choices provided in this problem.

Which of the following is not a tool used to conduct cost-volume-profit sensitivity analysis? spreadsheet software. algebraic equations. cost allocation. All of the choices represent tools used to conduct cost-volume-profit sensitivity analysis.

cost allocation.

The Bake Shop (TBS) buys and sells cakes. To preserve freshness TBS donates cakes that have not been sold within 5 days to charitable organizations. To avoid waste TBS usually orders fewer cakes than it can sell. Sold out signs are frequently seen in the store. Even so, the cakes come in several flavors and occasionally some of the flavors do not sell out before the 5 day shelf life expires. Cakes cost $8 each to purchase and are sold for $14 each. During the most recent month TBS had customer orders for 20 cakes that could not be filled due to a lack of inventory. There were only 4 cakes that had to be donated to charity during the month. Based on this information the

cost of waste amounted to $56. cost of waste amounted to $160. opportunity cost amounted to $80. opportunity cost amounted to $120.

Thomas Co. buys and sells a product that has a variable cost per unit of $18. Thomas' fixed costs amount to $48,000. The product sells for $22 each. Thomas currently expects to make and sell 14,000 units. Management believes that if the price per unit is lowered by one dollar, the Company could sell an additional 3,000 units of product. If Thomas implements the lower price strategy, profitability will increase by $8,000. decrease by $3,000. decrease by $5,000. increase by $2,000.

decrease by $5,000.

At lunchtime, Pete's Chilly Dogs sells hot dogs, chips, and soft drinks from five portable hot dog carts stationed on busy street corners. The depreciation cost on the carts is $1,000 per year for each cart. The company buys supplies (hot dogs, chips, cups, napkins) as needed. The 5 cart operators are each paid $8,000 per year plus 5% of sales revenue. Relative to the number of customers at a particular hot dog stand, the depreciation cost is strategic. fixed. mixed. variable.

fixed.

Underwood, Inc. buys and sells a product that has a sales price of $24 and variable cost per unit of $20. Underwood's fixed costs amount to $96,000. Underwood currently expects to make and sell 28,000 units. Management plans to increase the selling price to $25 per unit. The Company expects a negative reaction from some customers and has budgeted a $12,000 increase in fixed advertising costs to offset a possible decline in sales. Even so Underwood expects sales to drop by 1,000 units. Based on this information Underwood should reject the new strategy because you can never make money by losing customers. implement the new strategy because profitability will increase. reject the strategy because the margin of safety measured in units will decline. None of the choices is correct.

implement the new strategy because profitability will increase.

All other things being equal, if Kitts Company increases its total fixed cost, the number of units necessary to reach the break-even point will increase. decrease. remain constant. The answer cannot be provided from the information provided.

increase

Thomas Co. buys and sells a product that has a variable cost per unit of $18. Thomas' fixed costs amount to $48,000. The product sells for $22 each. Thomas currently expects to make and sell 14,000 units. Management has an opportunity to reduce its variable cost per unit by one dollar. If Thomas passes the savings on to its customers by lowering the sales price, the lower sales price will increase sales by 1,000 units. If management implements the new pricing strategy, profitability will increase by $8,000. decrease by $12,000. decrease by $20,000. increase by $4,000.

increase by $4,000.

Calpo Co. buys and sells a product that has a variable cost per unit of $18. Calpo's fixed costs amount to $48,000. The product sells for $22 each. As a result of competition Calpo has been forced to establish a target sales price of $21 per unit. If Calpo implements the pricing strategy, the break-even point will increase by $16,000. decrease by $72,000. decrease from 16,000 units to 12,000. increase from 12,000 units to 16,000.

increase from 12,000 units to 16,000.

The wages of factory maintenance personnel would usually be considered as:

indirect and manufacturing costs

According to GAAP, which type of costs are classified as product cost? downstream costs midstream costs upstream costs both downstream and upstream costs

midstream costs

Green Manufacturing Company produces a product that has a variable cost of $30 per unit. Fixed costs amount to $240,000. The selling price of the product is $36. The contribution margin per unit is: $66. $36. $30. none of the above.

none of the above.

Kitts Co. buys and sells a product that has a variable cost per unit of $18. Kitts' fixed costs amount to $48,000. The product sells for $22 each. The Company is currently making and selling 16,000 units of product. If Kitts is able to increase sales by 2,000 units, the break-even point will increase by $8,000. decrease by $8,000. not change. The answer cannot be determined with the information provided.

not change.

Clipper Company sells two types of nail clippers. One focuses on the economy oriented customer and the other aims to satisfy the high-end clientele. The economy clipper costs $5 and has a sales price of $9. The high-end model costs $9 and sells for $15. Fixed costs associated with this product line amount to $35,880. Economy clippers constitute 70 percent of the market with the remaining 30 percent being high-end clippers. Assume Clipper Company currently sells 10,500 units of clippers and earns a $12,420 profit. Management believes the profitability can be improved by shifting the sales mix to 60 percent share for the economy line and 40 percent for the high-end line. The company believes it can continue to sell a total of 10,500 under the new sales mix. If management is able to accomplish the shift in sales mix profit will increase by $2,100. profit will increase by $14,520. profit will decrease $12,420. profit will not be affected.

profit will increase by $2,100.

The break-even point is the point at which revenue exceeds variable cost but does not fully cover fixed cost. revenue exceeds fixed cost but does not fully cover variable cost. revenue exceeds the total of fixed plus variable cost. revenue is equal to the total of fixed plus variable costs.

revenue is equal to the total of fixed plus variable costs.

Omega Company has sales of $300,000 and cost of goods sold of $200,000. The cost of goods sold is a variable cost. The Company incurred $20,000 of fixed operating expenses and $40,000 of variable operating expenses. Based on this information net income is $40,000 under the gross margin format and $100,000 under the contribution margin format. net income is $100,000 under the gross margin format and $40,000 under the contribution margin format. the company's gross margin is $100,000, while its contribution margin is $60,000. the company's gross margin is $60,000, while its contribution margin is $100,000.

the company's gross margin is $100,000, while its contribution margin is $60,000.

With respect to a company that is currently earning a profit, the lower the margin of safety the less likely a company is to incur a loss. the higher the margin of safety the more likely a company is to incur a loss. the higher the margin of safety the less likely a company is to incur a loss. None of the choices is correct.

the higher the margin of safety the less likely a company is to incur a loss.

what is avg cost formula?

total cost/ number of units

A company that has a sales mix that includes several products should strive to sell more of the product that has the highest per unit contribution margin even if that product has the lowest per unit sales price. This statement is

true

All other things being equal, decreasing the contribution margin per unit will increase the number of units that must be sold to earn a desired profit. This statement is

true

Assuming sales equals production, and beginning and ending inventories are zero, The amount of net income determined for an accounting period will be the same regardless of whether the income statement is prepared under a contribution margin format used in managerial accounting or the product costing format use in financial accounting. This statement is

true

Generally accepted accounting principles (GAAP) require midstream costs to be reported separately from upstream and downstream costs on public financial statements. (true or false)

true

If a manager misclassifies a selling and administrative expense as a product cost and the number of units of the product made is equal to the number of units sold, the amount of net income will not be affected. This statement is

true

Investigating a multitude of what-if possibilities for the impact that simultaneous changes in fixed cost, variable cost, and/or volume have on profitability is commonly called sensitivity analysis. This statement is

true.

At lunchtime, Pete's Chilly Dogs sells hot dogs, chips, and soft drinks from five portable hot dog carts stationed on busy street corners. The depreciation cost on the carts is $1,000 per year for each cart. The company buys supplies (hot dogs, chips, cups, napkins) as needed. The 5 cart operators are each paid $8,000 per year plus 5% of sales revenue. Relative to the number of hot dog carts, the depreciation cost is fixed. mixed. strategic. variable.

variable

The contribution margin is determined by subtracting variable product and variable period cost from sales. variable product and fixed product costs from sales. fixed product cost from sales. variable product and fixed period cost from sales.

variable product and variable period cost from sales.

On a graph the break-even point is located at the point where the total revenue line crosses the fixed cost line. at the intercept of the variable cost line. at the slope of the fixed cost line. where total revenue line crosses the total cost line.

where total revenue line crosses the total cost line.


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