Financial & Managerial Accounting
14th Edition
ISBN: 9781337119207
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 20, Problem 20.10EX
To determine
Contribution Margin Analysis
Contribution margin analysis emphasized on explaining the differences between planned and actual contribution margins. Managers regularly use the contribution margin in planning and supervisory the operations.
Quantity Factor
The outcome of a difference in the number of units sold, assuming there is no change in sale price per unit. The difference comes in positive, and it increases the contribution margin, the difference comes in negative, and it decreases the contribution margin.
To Explain: The reason how the quantity factor increase or decrease in the amount of sales computed using the contribution margin analysis.
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What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?
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Which method results in a more realistic amount for income because it matches the most current costs against revenue?
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Chapter 20 Solutions
Financial & Managerial Accounting
Ch. 20 - What types of costs are customarily included in...Ch. 20 - Which type of manufacturing cost (direct...Ch. 20 - Which of the following costs would be included in...Ch. 20 - In the variable costing income statement, how are...Ch. 20 - Since all costs of operating a business are...Ch. 20 - Discuss how financial data prepared on the basis...Ch. 20 - Why might management analyze product...Ch. 20 - Explain why rewarding sales personnel on the basis...Ch. 20 - Discuss the two factors affecting both sales and...Ch. 20 - How is the quantity factor for an increase or a...
Ch. 20 - Explain why service companies use different...Ch. 20 - Variable costing Marley Company has the following...Ch. 20 - Variable costingproduction exceeds sales Fixed...Ch. 20 - Variable costing sales exceed production The...Ch. 20 - Analyzing income under absorption and variable...Ch. 20 - Contribution margin by segment The following...Ch. 20 - Contribution margin analysis The actual variable...Ch. 20 - Inventory valuation under absorption costing and...Ch. 20 - Income statements under absorption costing and...Ch. 20 - Income statements under absorption costing and...Ch. 20 - Cost of goods manufactured, using variable costing...Ch. 20 - Variable costing income statement On November 30,...Ch. 20 - Absorption costing income statement On March 31....Ch. 20 - Variable costing income statement The following...Ch. 20 - Estimated income statements, using absorption and...Ch. 20 - Variable and absorption costing Ansara Company had...Ch. 20 - Prob. 20.10EXCh. 20 - Prob. 20.11EXCh. 20 - Product profitability analysis Power Train Sports...Ch. 20 - Territory and product profitability analysis Coast...Ch. 20 - Sales territory and salesperson profitability...Ch. 20 - Segment profitability analysis The marketing...Ch. 20 - Prob. 20.16EXCh. 20 - Contribution margin analysis sales Select Audio...Ch. 20 - Prob. 20.18EXCh. 20 - Contribution margin analysis variable costs Based...Ch. 20 - Variable costing income statement for a service...Ch. 20 - Contribution margin reporting and analysis for a...Ch. 20 - Variable costing income statement and contribution...Ch. 20 - Absorption and variable costing income statements...Ch. 20 - Income statements under absorption costing and...Ch. 20 - Absorption and variable costing income statements...Ch. 20 - Salespersons' report and analysis Walthman...Ch. 20 - Segment variable costing income statement and...Ch. 20 - Contribution margin analysis Farr Industries Inc....Ch. 20 - Prob. 20.1BPRCh. 20 - Income statements under absorption costing and...Ch. 20 - Absorption and variable costing income statements...Ch. 20 - Salespersons' report and analysis Pachec Inc....Ch. 20 - Variable costing income statement and effect on...Ch. 20 - Contribution margin analysis Mathews Company...Ch. 20 - Prob. 1ADMCh. 20 - Prob. 2ADMCh. 20 - Apple Inc.: Segment revenue analysis Segment...Ch. 20 - LVMH: Group segment sales and EBITDA analysis LVMH...Ch. 20 - Prob. 20.1TIFCh. 20 - Communication Bon Jager Inc. manufactures and...
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- Explain how a contribution margin income statement can be used to determine profitability.arrow_forwardWhich of the following ratios indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit? a. costs and expenses ratio b. contribution margin ratio c. margin of safety ratio d. profit ratioarrow_forwardWhich of the following would be considered as a limiting factor to maximize the profit? O a. Book value O b. Fixed cost Oc. Contribution d. Salesarrow_forward
- Which of the following formulas is used to calculate the contribution margin ratio?(Sales − Fixed costs) ÷ Sales.(Sales − Total costs) ÷ Sales.(Sales − Cost of goods sold) ÷ Sales.(Sales − Variable costs) ÷ Sales.arrow_forwardWhat's the difference between the profit margin and gross margin ratio?arrow_forwardIdentify two ways in which a contribution margin income statement differs in format from a traditional income statement. Which is more useful for decision making and why?arrow_forward
- Prepare an analysis of the sales quantity and unit price factors did the price decrease generate sufficient volume to result in a net increase in contribution marginarrow_forwardTarget profit is added to what other financial statement line item, or element, to determine the numerator in the overall target contribution margin (CM) calculation in break-even analysis? Variable costs Fixed costs Net income after taxes Operating profitarrow_forwardThe difference between total sales in dollars and total variable expenses is called: a. net profit b. net operating income c. the gross margin O d. the contribution marginarrow_forward
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