Part 1
Abe, Inc. has a contribution margin of $60,000 and net income of
$20,000.
Zeb,...
Part 1
Abe, Inc. has a contribution margin of $60,000 and net income of
$20,000.
Zeb, Inc. has a contribution margin of $44,000 and net income of
$22,000.
Which of the following statements is false?
Multiple Choice
Abe’s cost structure has a higher percentage of fixed costs than
Zeb’s cost structure.
Abe’s profits are must sensitive to changes in sales.
Abe's net income grows one third as fast as its sales
If sales increase, Abe will experience a greater percentage...
1)True or False: Accounts receivable capture sales and accounts
payable capture COGS
2)True or False: Per...
1)True or False: Accounts receivable capture sales and accounts
payable capture COGS
2)True or False: Per the flow of the Income Statement, we should
deduct tax expenses and then interest expenses in order to obtain
net income, which is often referred to as the "bottom line."
3)True or False: Depreciation is added to earnings on the
statement of cash flows because it was included in COGS on the
Income Statemet
4)True or False:EBIT stands for " earnings before income
taxes"...
1. A differential cost is a variable cost
True
False.
2. If the number of units...
1. A differential cost is a variable cost
True
False.
2. If the number of units sold increase, the break-even point
will decrease.
True
False.
3. All other things the same, a decrease in variable expenses
per unit will reduce the break-even point.
True
False.
4. Inventories are usually the most liquid, but lowest-yielding,
current asset of a firm.
True
False.
5. A sunk cost is a cost that has already been incurred but that
can be avoided at least...
Contribution Margin Variance, Contribution Margin Volume
Variance, Market Share Variance, Market Size Variance
Sulert, Inc., produces...
Contribution Margin Variance, Contribution Margin Volume
Variance, Market Share Variance, Market Size Variance
Sulert, Inc., produces and sells gel-filled ice packs. Sulert’s
performance report for April follows:
Actual
Budgeted
Units sold
290,000
300,000
Sales
$1,450,000
$1,515,000
Variable costs
652,500
636,300
Contribution margin
$ 797,500
$ 878,700
Market size (in units)
1,250,000
1,200,000
Required:
2. Calculate the market share variance and the
market size variance. In your computations, round the unit
contribution margin to three decimal places and round the market...
E5-3 Calculating Contribution Margin and Contribution Ratio,
Preparing Contribution Margin Income Statement [LO 5-5]
Morning Dove...
E5-3 Calculating Contribution Margin and Contribution Ratio,
Preparing Contribution Margin Income Statement [LO 5-5]
Morning Dove Company manufactures one model of birdbath, which
is very popular. Morning Dove sells all units it produces each
month. The relevant range is 0–2,500 units, and monthly production
costs for the production of 2,200 units follow. Morning Dove’s
utilities and maintenance costs are mixed with the fixed components
shown in parentheses.
Production Costs
Total
Cost
Direct materials
$
1,500
Direct labor
6,700
Utilities ($130...