1.)contribution margin is the amount remainng after: a. variable expenses have b
ID: 2459304 • Letter: 1
Question
1.)contribution margin is the amount remainng after:
a. variable expenses have been deducted from sales revenue
b. fixed expenses have been deducted from sales revenue
c. fixed expenses have been deducted from variable expenses
d. cost of goods sold has been deducted from sales revenues
2.) the contribution margin ratio is equal to
a. total manufacturing expense/sales
b. (sales-variable expenses)/ sales
c. 1-(gross margin/sales)
d. 1-(contribution margin/sales)
3.) which of the following is not a correct difinition of the break-even point?
a. the excess of budgeted or actutal sales over bugeted or acutal variable
b. the point where total profit equals total fixed expenses
c. the point where total contribution margin equals total fixed expenses
d. the point where total profit equals zero
6.) reynolds enterprises sells a single product for $25. the variable expense per unit is $15 and the fixed expense per unit is $5 at the current level of sales. the company's net operating income will increase by $10 if one more unit is sold. TRUE OR FALSE
Explanation / Answer
.)contribution margin is the amount remaining after-a. variable expenses have been deducted from sales revenue
Contribution = Sales – variable cost
In marginal costing only variable costs are deducted to calculate the contribution margin
2.) the contribution margin ratio is equal to- b. (sales-variable expenses)/ sales
Contribution margin = contribution /sale *100
And we know that sales – variable cost equals contribution hence sales – variable expense/ sales is correct option
3) 3.) which of the following is not a correct difinition of the break-even point
c. the point where total contribution margin equals total fixed expenses
Break even point = Fixed cost/ contribution
Hence it is point of no profit and no loss
4) 6.) reynolds enterprises sells a single product for $25. the variable expense per unit is $15 and the fixed expense per unit is $5 at the current level of sales. the company's net operating income will increase by $10 if one more unit is sold. TRUE
Sales – variable cost = contribution
So contribution = $25 - $15 = $10
Since fixed cost will remain same for each unit increase only cost we need to recover is variable cost so this is true that for each unit there will be increase of net operating income by $10
.)contribution margin is the amount remaining after-a. variable expenses have been deducted from sales revenue
Contribution = Sales – variable cost
In marginal costing only variable costs are deducted to calculate the contribution margin
2.) the contribution margin ratio is equal to- b. (sales-variable expenses)/ sales
Contribution margin = contribution /sale *100
And we know that sales – variable cost equals contribution hence sales – variable expense/ sales is correct option
3) 3.) which of the following is not a correct difinition of the break-even point
c. the point where total contribution margin equals total fixed expenses
Break even point = Fixed cost/ contribution
Hence it is point of no profit and no loss
4) 6.) reynolds enterprises sells a single product for $25. the variable expense per unit is $15 and the fixed expense per unit is $5 at the current level of sales. the company's net operating income will increase by $10 if one more unit is sold. TRUE
Sales – variable cost = contribution
So contribution = $25 - $15 = $10
Since fixed cost will remain same for each unit increase only cost we need to recover is variable cost so this is true that for each unit there will be increase of net operating income by $10
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