. A contribution approach income statement can usually be easily prepared from t
ID: 2380555 • Letter: #
Question
. A contribution approach income statement can usually be easily prepared from the
information contained in a corporation's published income statement.
TRUE FALSE
12. The contribution margin ratio measures the effect on the total contribution margin of a given
change in total sales.
TRUE FALSE
13. At the break-even point, variable expenses and fixed expenses are equal.
TRUE FALSE
14. The break-even point occurs where profits is zero.
All other things the same, a decrease in variable expense per unit will reduce the break-even point.
TRUE FALSE
16. Margin of safety is the excess of variable costs over fixed costs.
TRUE FALSE
17. All other things the same, in periods of increasing sales, net operating income will tend to
increase more rapidly in a company with high variable costs and low fixed costs than in a
company with high fixed costs and low variable costs.
TRUE FALSE
18. Contribution margin and gross margin mean the same thing.
A contribution approach income statement can usually be easily prepared from the information contained in a corporation's published income statement. The contribution margin ratio measures the effect on the total contribution margin of a given change in total sales. At the break-even point, variable expenses and fixed expenses are equal. The break-even point occurs where profits is zero. All other things the same, a decrease in variable expense per unit will reduce the break-even point. Margin of safety is the excess of variable costs over fixed costs. All other things the same, in periods of increasing sales, net operating income will tend to increase more rapidly in a company with high variable costs and low fixed costs than in a company with high fixed costs and low variable costs. Contribution margin and gross margin mean the same thing.Explanation / Answer
12.true
13.true
14.false
15.true
16.false
17.false
18.true
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