What tool should be used to compare actual to budgeted company fixed cost? Question 4 options: A) Cost-Volume-Profit Analysis B) Vertical Analysis C) Ratio Analysis D) Horizontal Analysis
Added by Lori K.
Step 1
** Show more…
Show all steps
Your feedback will help us improve your experience
Haricharan Gupta and 65 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
An important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is: a. target income analysis b. cost-volume profit analysis c. least-square regression of costs d. variance analysis e. process costing
Haricharan G.
5. Cost-volume-profit (CVP) analysis can be used as a sensitivity analysis technique to determine what the effect of certain internal decisions of management or external changes will be on profits, break-even and margin of safety figures. If all other factors were kept constant, the following will lead to an increase in profit: a. Decrease in selling price per unit. b. Decrease in sales volumes. c. Decrease in fixed costs. d. Increase in variable costs per unit. 6. Which one of the following statements is NOT an assumption of CVP analysis: a. All costs, manufacturing, administrative as well as marketing and selling costs are considered and can be separated into either fixed costs or variable costs. b. The analysis is always made within the relevant range. c. All the units that are manufactured are sold. d. CVP analysis applies to long-term planning only. 7. Which one of the following would be classified as a fixed cost? a. The routine, monthly maintenance of machinery b. The wood used in the production of furniture. c. The screws used in the production of a machine d. The piecemeal wages paid to workers assembling a product. 8. Which one of the following statements is correct, if the absorption costing method is applied? a. Net income fluctuates in direct proportion with changes in sales volume. b. Fixed production and fixed selling costs are considered to be product costs. c. Variable selling expenses are included in product costs. d. Unit product costs can change as a result of changes in the number of units manufactured.
Adi S.
The examination of the relationships among selling prices, sales and production volume, costs, expenses, and profit is a. cost-volume-profit analysis. b. fixed cost analysis. c. break even. d. contribution margin.
Sanchit J.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD