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4 years ago

Select the correct statement regarding break-even point analysis.

Business

1 answer:

svetoff [14.1K]4 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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3 years ago

A product enters the maturity phase of the life cycle, during which cells are strong but growth is slowing. What product managem

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Answer:

Explanation:

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3 years ago

Read 2 more answers

10 roles of insurance in a business

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Protection from unexpected losses
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3 years ago

EBook

attashe74 [19]

Answer:

McDade Company

Comparative Income Statement

For the Years Ended December 31, 2012 and 2011

2012 2011 Change %

Sales $16,800,000 $15,000,000 $1,800,000 12%

COGS ($11,500,000) ($10,000,000) $1,500,000 15%

Gross profit $5,300,000 $5,000,000 $300,000 6%

Selling expenses ($1,770,000) ($1,500,000) $270,000 18%

Adm. expenses ($1,220,000) ($1,000,000) $220,000 22%

Operating exp. ($2,990,000) ($2,500,000) $490,000 19.6%

Operating income $2,310,000 $2,500,000 ($190,000) -7.6%

Other revenue $256,950 $225,000 $31,950 14.2%

EBT $2,566,950 $2,725,000 ($158,050) -5.8%

Income taxes ($1,413,000) ($1,500,000) ($87,000) -5.8%

Net income $1,153,950 $1,225,000 ($71,050) -5.8%

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3 years ago

During its first year of operations, Marigold Corporation had the following transactions pertaining to its common stock. Jan. 10

RideAnS [48]

Answer:

Journalize the transactions is given below

Explanation:

given data

Issued = 66,500 shares

cash = $6 per share

Issued = 41,500 shares

cash = $8 per share

solution

we get here Journalize the transactions

and we assuming that the common stock has a par value of $6 per share

Jan. 10 cash is 66,500 × 6 = 399000

and cash for July 1 is = 41,500 × 8 = 332000

and common stock = 41,500 × 6 = 249000

paid in capital excess = 332000 - 249000 = 83000

Date Account Titles Debit Credit

Jan. 10 cash 399000

common stock 399000

July 1 cash 332000

common stock 249000

paid in capital excess 83000

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3 years ago