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ACCT 302 Test 2
Terms in this set (10)
At the breakeven point, the contribution margin equals total
D. Fixed costs.
Cost-volume-profit (CVP) analysis allows management to determine the relative profitability of a product by
C. Determining the contribution margin per unit and the projected profits at various levels of production.
Cost-volume-profit (CVP) analysis is a key factor in many decisions, including choice of product lines, pricing of products, marketing strategy, and use of productive facilities. A calculation used in a CVP analysis is the breakeven point. Once the breakeven point has been reached, operating income will increase by the
B. Contribution margin per unit for each additional unit sold.
Which of the following is a characteristic of a contribution income statement?
B. Fixed expenses are listed separately from variable expenses.
The method of cost accounting that lends itself to breakeven analysis is
A. Variable costing.
Cost-volume-profit relationships that are curvilinear may be analyzed linearly by considering only
D. A relevant range of volume.
When an organization is operating above the breakeven point, the degree or amount that sales may decline before losses are incurred is called the
C. Margin of safety.
The dollar amount of revenues needed to attain a desired income is calculated by dividing the contribution margin ratio (CMR) into
C. Desired income plus fixed costs.
The breakeven point in units increases when unit costs
A. Increase and sales price remains unchanged.
Del Co. has fixed costs of $100,000 and breakeven sales of $800,000. What is its projected profit at $1,200,000 sales?
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