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chpt 5 managerial
Managerial Accounting – UFC1
| Question | Answer |
|---|---|
| List the cost estimation methods from the least precise to the most precise with the least precise on top | Scatter diagrams High-low method Least-Squares regression |
| To figure contribution margin ratio | amount of sales-variable cost/amount of sales =% (contribution margin ratio) |
| When using the high-low method, the estimated line of cost behavior connects the : | two costs at the highest and lowest volumes |
| Types of fixed costs | Depreciation Property taxes |
| Types of Variable costs | Direct Materials Shipping costs |
| Types of Mixed Cost | Water and sewer sales rep's pay |
| The break-even point is the sales level at which a company | has a profit of $0 and contribution margin equals fixed costs. |
| The amount by which a product's unit-selling price exceeds its total unit variable cost is the | Contribution margin per unit |
| Cost-volume-profit analysis helps managers predict how changes in ___________and __________levels affect income. | Costs and sales |
| A company has a margin of safety of 20%. If expected sales are $50,000, then break-even sales are: | $40,000 Found by 50000*20%=10,000 then subtract the 10,000 from the 50,000 |
| How to find Contribution Margin Approach | Sales revenue per unit minus variable costs per unit = Contribution margin per unit |
| Because of its usefulness in CVP analysis, managers generally use an income statement in which format? | Contribution margin income statement |
| Conventional CVP analysis requires management to classify all costs as either _____ or ______ with respect to production or sales volume. | variable or fixed |
| Which of the following is the correct statement about variable costs? | The variable cost per unit does not change when volume changes |
| On a CVP chart, on either side of the break-even point, the vertical distance between the total sales line and the total cost line represents: | total profit to the right of the intersection and Total loss to the left of the intersection |
| The contribution margin ratio is interpreted as the percent of: | each sales dollar that remains after deducting unit varable cost |
| On a CVP chart, the line which crosses the vertical axis at the level of fixed costs and slopes upwards represents_________costs. | Total |
| Contribution margin per unit contributes to covering _____costs and then generating ________ on a per unit basis. | Fixed profits |
Created by:
smcdo11