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How can managers determine the breakeven point or the output needed to achieve a target operating income? 2) How can managers incorporate income taxes into CVP analysis?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 13MC: A responsibility center structure that considers investments made by the operating segments by using...

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How can managers determine the breakeven point or the output needed to achieve a target operating income?

2) How can managers incorporate income taxes into CVP analysis?

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The high-low method and least-squares regression are used by managers to _____________________. A. decide whether to make or buy a component part B. minimize corporate tax liability C. maximize output D. estimate costs
Cost-volume-profit (CVP) analysis for revenue planning determines: The desired profit level of a firm. Both revenue maximization and cost minimization. The costs associated with a certain level of revenue. The max amount of revenue a firm can receive. The revenue required to achieve a desired profit level.
CLEAR MY CHOICE Which of the following statements about CVP analysis is false? O a. Operating income calculations in CVP analysis are based on contribution margin not gross margin. O b. All of the given answers are true. O c. Total revenues and total costs are linear in relation to output units. O d. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income O e. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. NEXT PAC AGE ere to search
A responsibility center structure that considers investments made by the operating segments by using a common cost of capital percentage is called_______. A. return on investment B. residual income C. a profit center D. a discretionary cost center
Explain the benefits of a residual income structure within an investment center framework. It may help to think of an example using an existing company.
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Which of the following is the indicator of the rate at which company is earning profit? Select one: a. Margin of safety b. All options are correct c. Contribution margin d. Profit volume ratio
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