1 point When calculating a company's free cash flow from earnings before interest and taxes we must add back depreciation, amortization and depletion expense and allowances because * O They approximate the value of fixed asset purchases during the year. O They are non-cash expenditures. O They are unrelated to the amount of taxes paid during the year. The accounting method for reporting such expenses may be different from that reported to the taxing authority. 1 point Gross profit variance analysis can be used to study the effect of: * O Changes in selling prices on a company's profitability All of the choices. O Changes in volume of goods sold on a company's profitability. O Changes in cost of goods sold on a company's profitability O Changes in product sales mix on a company's profitability 1 point All other things being equal, a company that sells multiple products should attempt to structure its sales mix so the greatest portion of the mix is composed of those products with the highest: * O Gross profit/margin per unit O Cost of goods sold. O Quantity/unit sold. O Fixed costs. O Selling price Which of the following underlying assumptions form(s) the basis 1 point for gross profit variance analysis? In multiproduct organizations, the sales mix remains discretionary Costs can be categorized as variable. O Sales and costs behave in a linear manner. O All of the choices are assumptions that underlie gross profit variance analysis. Back Next