22 - c. sales price per were remained constant. (d....

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1. Break-even analysis is a special case of CVP analysis. (True) 2. CVP analysis can be used to predict the affects of reduce selling prices, increase fixed cost, reduce variable cost, [ ? ? ? ? ;;;] on break-even point. (True) 3. CVP analysis is frequently based on the assumption that the productions level will be the same as the sales level. (True) 4. As the level of output increases, fixed cost per unit remains constant. (False) 5. An important tool in predicting the volume of activity cost to be incurred, sales to be earned and profit to be received is called CVP analysis. 6. A company is normal operating range which excludes extremely high and low volumes that are not likely to accrue is called relevant range. cf. Margin of safety: excess of expected sales over break-even sales 7. CVP analysis is based on three basic assumptions. Those assumptions are a. Total fixed cost were remained constant. b. variable cost per unit were remained constant.
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Unformatted text preview: c. sales price per were remained constant. (d. curvilinear cost will change per portionally? with changes in volume. 8. What is the contribution margin ratio? : It is the percent of its sales dollar that remains after deducting unit variable cost. 9. If a firm’s forecasted sales are 250,000 and its break even point is 190,000. What is a margin of safety?? 60,000 10. Targeted sales of unit 11. break-even point in unit 12. break-even point in dollars 13. Contribution margin in dollar is divided by pretax income is the formula for what?? (Degree of operating range) 14. Length cost estimation method from greatest lowest degree of expected precision? Least-squares regression, scatter diagrams, high-low level method Terms & definition Fixed cost, Variable cost, Mixed cost, Stepwise cost, Curve linear cost 5 points question Dollar sales need to generate after tax income....
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This note was uploaded on 04/02/2012 for the course ECON 1 taught by Professor 1 during the Spring '12 term at The University of Oklahoma.

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