Chapter 6

Ace your homework & exams now with Quizwiz!

Select all that apply Contribution margin equals sales minus ______.

variable manufacturing costs variable selling and administrative costs

Select all that apply CVP analysis can be useful in deciding ______.

what marketing strategy to use which products to offer what cost structure to implement what price to charge for goods or services which services to offer

The goal of break-even analysis is to find the level of sales where profit is equal to ______.

zero

The contribution margin stated as a percentage of sales dollars is the ______.

contribution margin ratio

According to the assumptions of CVP, ______ will not change as the volume of a product increases or decreases.

price

Steel, Inc. has a margin of safety in dollars of $559,740. If actual sales were $2,946,000, Steel's margin of safety percentage is %. (Enter your answer as a whole number.)

Blank 1: 19

Seth's Speakers had actual sales of $1,630,000. If break-even sales equals $935,000, Seth's margin of safety in dollars is ______.

$695,000 Reason: $1,630,000 - $935,000 = $695,000

Select all that apply Which of the following are assumptions of cost volume profit analysis?

-All costs can be classified as either fixed or variable. -In multi-product companies, the sales mix is constant. -Production volume is equal to sales volume.

Jump-It Corporation has a margin of safety of $272,000. The company sold 100,000 units this year. If the company sells each unit for $17, the margin of safety percentage is ______.

16% Reason: $272,000 ÷ (100,000 × $17) = 16%.

The extent to which a company uses fixed costs (as opposed to variable costs) in its operations is called ___ ___. (Enter only one word per blank.)

Blank 1: cost Blank 2: structure

When constructing a CVP graph, the place where the total ___ cost line intercepts the y-axis represents total costs. (Enter only one word per blank.)

Blank 1: fixed

The excess of the budgeted (or actual) sales dollars over break-even sales is called the ___ of ____. (Enter only one word per blank).

Blank 1: margin Blank 2: safety

Decisions about whether to use fixed or variable costs to run a business affects a company's ___ leverage. (Enter only one word per blank.)

Blank 1: operating

How much contribution margin is generated per dollar of sales revenue is the contribution margin ___ . (Enter only one word per blank.)

Blank 1: ratio

When constructing a CVP graph, the of the ___ line represents variable cost per unit. (Enter only one word per blank)

Blank 1: slope

Methods that can be used to model the relationship between revenues, costs, profit and volume include the ___ contribution margin method and the contribution ___ ___ method. (Enter only one word per blank.)

Blank 1: unit Blank 2: margin Blank 3: ratio

Which of the following is NOT a method used for basic CVP analysis?

Break-even analysis

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

True or false: CVP analysis is only used for break-even and target profit analysis.

False

True or false: Cost structure refers to how a company uses product and period costs in an organization.

False

True or false: The margin of safety is the excess of break-even sales dollars over budgeted (or actual) sales dollars.

False

Decisions about whether to use fixed or variable costs to run a business impact a company's ______.

operating leverage

Contribution margin equals sales minus ______.

all variable costs

Solving for the sales level needed to achieve a profit of zero is ______ analysis.

break-even

Margin of safety in dollars is ______.

budgeted (or actual) sales minus break-even sales

Select all that apply CVP ______.

can be used to make many different decisions can be used for "what-if" analysis allows managers to see how changing one variable can impact another

When constructing a CVP graph, the vertical axis represents ______.

dollars


Related study sets

Chapter 14: Assessing Skin, Hair, and Nails Combined (Final)

View Set

19 Quiz 1 - The Nursing Process - Blended Skills & Critical Thinking

View Set

מערכת קרדיו - סרחיו

View Set

AP Bio Ch 19: Viruses (multiple choice)

View Set

What does learning entail? When is it most effective? (Exam 1)

View Set

Phlebotomy Essentials 6th edition. ALL quizzes, ALL ch. tests, GRADED work, NOT guesses. PLUS, the FULL NAHP study guide

View Set