Determine which one of the following statements is correct: O a. Achange in the sales mix will normally result into a change in the breakeven point Ob. Normally companies with more than product will aim to achieve higher sales. O. In performing CVP analysis for companies with more than one product, he breakeven point must be calculated for each product separately. Od. Sales mix refers to the relative proportion of demand in which a company's products should be sold. Oe. All of the given statements are false.

Determine which one of the following statements is correct: O a. Achange in the sales mix will normally result into a change in the breakeven point Ob. Normally companies with more than product will aim to achieve higher sales. O. In performing CVP analysis for companies with more than one product, he breakeven point must be calculated for each product separately. Od. Sales mix refers to the relative proportion of demand in which a company's products should be sold. Oe. All of the given statements are false.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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For CVP analysis calculations, which of the following statements is correct? A. In target profit calculations, sales revenue is less than total costs. B. CVP analysis relies on our knowledge of cost function to express relationships among costs, sales volume, and profit. OC. A company's sales mix is ultimately determined by the management of a company. D. The Break-even point is the point at which operating income is greater than $0. O E. If sales volume is expected to be higher than the indifference point, management should choose the cost structure with the higher fixed costs.
What can the weighted average contribution margin ratio be used for? To solve for a measure, at any level of sales volume, of the sensitivity of operating profit to changes in volume. Breakeven and profit planning for sales volume expressed in dollars (Y) rather than units (Q). To calculate an average per-unit contribution margin based on an assumed sales mix. To figure out the relative proportion in which a company’s products (or services) are sold. To determine the extent of fixed costs in an organization’s cost structure.
1. how would a cost volume profit analysis would be performed for a company that sells more than one product when the sales mix is known?
Which of the following is a TRUE statement about sales mix? Select one: O A. Profits will remain constant with an increase in total monetary sales if the total sales in units remains constant. OB. Profits may decline with an increase in total monetary sales if the sales mix shifts to sell more of the high contribution margin product. O C. Profits will remain constant with a decrease in total monetary sales if the sales mix also remains constant. O D. Profits may decline with an increase in total monetary sales if the sales mix shifts to sell more of the lower contribution margin product.
Which of the following is not an assumption underlying cost-volume-profit analysis?a. The sales mix is constant.b. The break-even point will be passed during the period.c. Total sales and total costs can be represented by straight lines.d. Costs can be accurately divided into fixed and variable components.
What can the weighted average contribution margin ratio be used for? Multiple Choice To solve for a measure, at any level of sales volume, of the sensitivity of operating profit to changes in volume. Breakeven and profit planning for sales volume expressed in dollars (Y) rather than units (Q). To calculate an average per-unit contribution margin based on an assumed sales mix. To figure out the relative proportion in which a company’s products (or services) are sold. To determine the extent of fixed costs in an organization’s cost structure.
Which of the following is not an assumption underlying cost-volume-profit analysis? a.The break-even point will be passed during the period. b.Total sales and total costs can be represented by straight lines. c.Costs can be accurately divided into fixed and variable components. d.The sales mix is constant.
APPLY THE CONCEPTS: Target income (sales revenue) Another useful method for figuring out the type of performance your company will need to reach a target income is by using sales revenue. Rather than using the number of units, this method uses total sales revenue. In companies for which the total set of goods produced and sold is more varied, this would be the preferred method, as opposed to a business in which only one product is sold. Assume a company has pricing and cost information as follows: Price and Cost Information Amount Selling Price per Unit $30 Variable Cost per Unit $15 Total Fixed Cost $15,000 For the upcoming period, the company wishes to generate operating income of $40,000. Given the cost and pricing structure for the company’s product, how much sales revenue must it generate to attain its target income? Step 1: Calculate the contribution margin ratio: The contribution margin ratio is the contribution margin in proportion to the selling price on a…
If a company increases its sales price per unit for Product A, the new breakeven point will a. increase. b. decrease. c. remain the same. d. More information is needed.
Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs are linear b. Sales mix of products sold does not change c. Selling price per unit changes with volume d. Costs can be divided into variable and fixed components e. Fixed cost per unit is not constant
1. The required sales in units to achive a target net income is? 2. What is the key factor in determining sales mix if a company has limited resources?
Direction: Read carefully and answer the questions below. Encircle the letter of the correct answer. 1. Which of the following is an example of a variable cost? а. interest b. ingredients с. insurance d. lease 2. What type of cost varies depending on the quantity of products being produced? а. fixed b. net sales с. total d. variable 3. Which among the following concepts is usually seen on the top item in an income statement from which all costs and expenses is subtracted to arrive at net income? a. fixed cost b. net sales с. total cost d. variable cost 4. When do we obtain the break-even point? When the fixed cost is equal to the total cost When the total cost is equal to the variable cost When the variable cost is equal to the fixed cost d. When the number of units of goods sold covers the all the costs а. b. с. 5. Which of the following is NOT true? а. The fixed cost does not vary over time. b. The total cost is the sum of the fixed cost and the variable cost. с. The total cost is…