In this paperwork of ACC 560 Week 5 Quiz 6 you will find the answers on the next questions:<\/b><\/p>\n
1. The CVP income statement classifies costs as variable or fixed and computes a contribution margin.<\/p>\n
2. In CVP analysis, cost includes manufacturing costs but not selling and administrative expenses.<\/p>\n
3. When a company is in its early stages of operation, its primary goal is to generate a target net income.<\/p>\n
4. The margin of safety tells a company how far sales can drop before it will be operating at a loss.<\/p>\n
5. Sales mix is a measure of the percentage increase in sales from period to period.<\/p>\n
6. Sales mix is not important to managers when different products have substantially different contribution margins.<\/p>\n
7. The weighted-average contribution margin of all the products is computed when determining the break-even sales for a multi-product firm.<\/p>\n
8. If Buttercup, Inc. sells two products with a sales mix of 75% : 25%, and the respective contribution margins are $80 and $240, then weighted-average unit contribution margin is $120.<\/p>\n
9. If fixed costs are $100,000 and weighted-average unit contribution margin is $50, then the break-even point in units is 2,000 units.<\/p>\n
10. Net income can be increased or decreased by changing the sales mix.<\/p>\n
11. The break-even point in dollars is variable costs divided by the weighted-average contribution margin ratio.<\/p>\n
12. When a company has limited resources, management must decide which products to make and sell in order to maximize net income.<\/p>\n
13. When a company has limited resources to manufacture products, it should manufacture those products which have the highest contribution margin per unit.<\/p>\n
14. If a company has limited machine hours available for production, it is generally more profitable to produce and sell the product with the highest contribution margin per machine hour.<\/p>\n
15. According to the theory of constraints, a company must identify its constraints and find ways to reduce or eliminate them.<\/p>\n
16. Cost structure refers to the relative proportion of fixed versus variable costs that a company incurs.<\/p>\n
17. Operating leverage refers to the extent to which a company’s net income reacts to a given change in fixed costs.<\/p>\n
18. The degree of operating leverage provides a measure of a company’s earnings volatility.<\/p>\n
19. If Sprinkle Industries has a margin of safety ratio of .60, it could sustain a 60 percent decline in sales before it would be operating at a loss.<\/p>\n
20. A company with low operating leverage will experience a sharp increase in net income with a given increase in sales.<\/p>\n","protected":false},"excerpt":{"rendered":"
In this paperwork of ACC 560 Week 5 Quiz 6 you will find the answers on the next questions: 1. The CVP income statement classifies costs as variable or fixed and computes a contribution margin. 2. In CVP analysis, cost Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-49825","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/49825","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=49825"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/49825\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=49825"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=49825"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=49825"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}