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ACC 241 Exam 2|94 Questions with Verified Answers,100% CORRECT
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ACC 241 Exam 2|94 Questions with Verified Answers
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ACC 241 Exam 2|94 Questions with Verified AnswersCost volume product (CVP) analysis focuses on how profits are affected by -
CORRECT ANSWER -Selling prices
-Sales volume
- unit variable costs
-Product mix
-Total fixed costs
Cost volume profit (CVP) analysis is useful when determining - CORRECT ANSWER
-Products and services to offer
-Prices to charge
-Marketing strategy to use
-Cost structure to implement
CVP analysis assumptions - CORRECT ANSWER -Selling price is constant
-Costs are linear
-Costs can be split into fixed and variable
-Total fixed variable unit cost are constant
-Sales mix is constant
-Inventory levels do not change
Break even point - CORRECT ANSWER the point at which the costs of producing a
product equal the revenue made from selling the product
Total revenue = total cost
Operating income = - CORRECT ANSWER Sales revenue (-) Variable expenses (-)
Fixed expenses
OR
Sales revenue (-) COGS (-) operating expenses
, Contribution margin - CORRECT ANSWER The amount remaining from sales
revenues after all variable expenses have been deducted.
Sales revenue (-) Variable expenses
Contribution margin ratio - CORRECT ANSWER Contribution Margin / Sales
Equal to the contribution margin as a percent of sales
Shows how the contribution margin will be affected by a change in total sales (i.e.
30 % CM ratio; $1.00 increase in sales = $0.30 increase in contribution margin)
Break even formula
Target profit formula - CORRECT ANSWER Sales = Variable expenses (+) Fixed
expenses (+) Profits
Q = Quantity sold at break even
Break even: Equation method - CORRECT ANSWER Sales = Variable expenses (+)
Fixed expenses
X = Break even point in sales dollars
X = 0.60x + $80000
Break even computations - CORRECT ANSWER Contribution margin method: a
shortcut version of the equation method
Break even in units - CORRECT ANSWER Fixed expenses/ Unit contribution margin
Break even in sales dollars - CORRECT ANSWER Fixed expenses/ CM ratio
Target profit; Contribution margin approach - CORRECT ANSWER Expands the
contribution margin formula to include desired profit
Unit sales to attain desired profit = (fixed expenses (+) Desired profit )/ Unit
contribution margin
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