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3 years ago

Select the correct statement regarding break-even point analysis.

Business

1 answer:

svetoff [14.1K]3 years ago

3 0

Answer:

Option B is true.

Explanation:

Giving the following information:

The break-even point in units formula is:

Break-even point= fixed costs/ contribution margin

What changes the break-even point:

A variation in fixed costs.

A variation on the selling price.

A variation in the unitary variable cost.

<u>The higher the fixed costs, the higher the number of units. Lower the contribution margin, the higher the number of units.</u>

Therefore:

a. An increase in contribution margin per unit causes the break-even point in units to increase. False, is the opposite.

b. An increase in fixed costs causes the break-even point to increase. True, now the organization needs to sell more units to cover the fixed costs.

c. The break-even point in sales dollars equals total fixed costs divided by contribution margin per unit. False, in dollars you need to divide it for the contribution margin ratio (contribution margin / selling price).

d. A decrease in the variable cost per unit causes the break-even point in units to increase. False, is the opposite.

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Nana76 [90]

Answer:

Readjusting once again to marketplace conditions, the next year the company produces 65,000 phones, with a retail price of $45. At the end of the year, the company’s sold almost its total supply of phones. It indicates that the equilibrium quantity of phones is 65,000, at a retail price of $45 (which would be the equilibrium price). More Resources

Explanation:

According to our curve, the equilibrium point initially is indicated by point E on the graph, but since the supply of cellphones has increased, quantity supplied increases to the graph indicated by S 1 S 1, this causes an excess of the product in the market resulting in a stiff competition which often sees the sellers reduce their prices. hope that helps.

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2 years ago

Inflation imposes many costs on the economy: shoe-leather costs, money illusion, menu costs, wealth redistribution, price confus

Flura [38]

Answer:

a. A jeweler observes the price of gold rise and wonders if there is a shortage of gold.

Costs imposes by Inflation: Price confusion

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Costs imposes by Inflation: Menu costs

c. Your grandmother's savings account pays 2% interest, but inflation is 5%.

Costs imposes by Inflation: Wealth redistribution

d. The CEO of GM worries that his revenue received in the future won't cover the expenses he incurs today.

Costs imposes by Inflation: Not associated with listed cost

e. Jim is reluctant to sell his stocks at the end of the year.

Costs imposes by Inflation: Not associated with listed cost

f. John thinks his new salary in NYC will increase his standard of living

Costs imposes by Inflation: Money illusion

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Costs imposes by Inflation: Shoe-leather costs

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2 years ago

What is information that CANNOT be measured and expressed in numbers? Question 1 options: Personal Information Target Market Dat

Neporo4naja [7]

Answer:

Qualitative data

Explanation:

Qualitative data is one that is used to characterise and categorise attributed of a population, as such it does not involve the use of numbers.

For example sex, state of origin, citizenship, name, and so on.

On the other hand the other options can be expressed as numbers. That is Personal Information, Target Market Data, and Quantitative data.

Basically qualitative data is descriptive rather than quantitative

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3 years ago

Knowledge Check 01 Which of the following is deducted from the total selling and administrative expense budget to determine the

makvit [3.9K]

Answer:

Knowledge Check 01 Which of the following is deducted from the total selling and administrative expense budget to determine the cash disbursements for selling and administrative expense budget?

Depreciation expense

Depreciation expense is a non cash charge since there is no cash outflow associated to it. The same applies for amortization expense, asset impairments, stock based compensation and asset depletion (similar to depreciation but used by extracting companies like mines and oil companies).

Knowledge Check 02 A company determines that the number of units sold is the cost driver for its variable selling and administrative expense budget. The product of its variable selling and administrative rate and budgeted unit sales will be ________.

total budgeted variable selling and administrative expenses

Since we are dealing with budgets, any calculation is also a budget or forecast. We are calculating here the total budgeted variable selling and administrative expense since we are multiplying the predetermined variable S&A per unit x budgeted units.

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3 years ago

Gamma Company budgeted to use 2 pounds of materials per unit at a budgeted cost of $100 per pound. Budgeted production and sales

MaRussiya [10]

Answer:

Gamma Company

The input price and input quantity variances are:

Input Price - Unfavorable; Input Quantity - Unfavorable

Explanation:

a) Data and Calculations:

Budgeted pounds of materials per unit = 2

Budgeted cost per pound = $100

Budgeted material price per unit = $200

Budgeted production and sales volume = 5,000 units

Budgeted materials = 10,000 pounds

Actual production and sales volume = 4,000 units

Standard quantity of materials for actual production = 8,000 (4,000 * 2)

Actual quantity of materials used = 8,080

Quantity variance = 80 (8,080 - 8,000) Unfavorable

Total budgeted cost = $800,000 (8,000 * $100)

Total actual cost = $824,160 (8,080 * $102)

Price variance = $2 ($102 - $100) Unfavorable

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3 years ago