Exam 15: Analyzing Cost-Volume-Profit Cvp Relationships and Marginal Contribution Break-Even MCB

Given the following information, determine the break-even selling price: Fixed costs, $10,000; number of covers 1,000; variable cost, $7.00 per cover.

Define differential analysis.

Contribution margin percentage equals:

All cost categories may be properly designated as fixed or variable.

If a company bank pays 5% interest, then a deposit of $1,000 today will be worth $1,050 one year from now. What is this called?

Marginal costing is defined as the amount of output, at any given volume, at which aggregate costs are changed if the volume of output is increased or decreased by one unit.

Sunk cost is a cost that has already been incurred and cannot be changed by any decision made now or in the future. Because sunk costs cannot be changed by any decision, they are not differential costs. Therefore, sunk costs should not be ignored when making a decision.

The results achieved through the least squares approach can be taken at face value.

Determine the break-even point given the following information: Fixed costs, $400,000; Variable cost percentage, 70%.

It is not desirable to use full-cost accounting in deciding when to reopen a restaurant in a hotel situation.

If the fixed costs of an operation are $7,000, and the contribution margin is 35%, then the level of sales required to break even is $22,000.

If fixed costs are $4,000, desired profit is $5,000, check average is $10, and the estimated number covers is 1500, what is the variable cost percentage that must be maintained to reach this objective?

True variable costs will retain the same cost percentage regardless of fluctuations in business.

Break-even analysis does not factor in:

The amount of output, at any given volume, at which the aggregate costs are changed if the volume of output is increased or decreased by one unit:

What is marginal costing?

Fixed costs are fixed in direct proportion to sales.

Determine the break-even point given the following information: Fixed costs, $300,000; CM%, 40%; and in addition the owner wants to make a profit margin of 6%. What is the sales volume required?

If the variable cost percentage in an operation is 69%, what is the contribution margin percentage?

If the variable cost percentage in an operation is 69%, then the contribution margin percentage must be 31%.