CVP Graph Commissions Description Fixed Expense Sales Total Expense 600K SOOK 400K 1. 300K 200K 100K OK OK 10K 20K 3OK 40K SOK Sales Volume (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 1a. The fact that the CVP graph's blue line is horizontal indicates which of the following statements is true? The average fixed expense per unit increases as the sales volume increases from 0 units to 50,000 units. The total fixed expense decreases as the sales volume increases from 0 units to 50,000 units. The total fixed expense increases as the sales volume increases from 0 units to 50,000 units. The total fixed expense does not change between a sales volume of O units and 50,000 units. 1b. The fact that the CVP graph's purple line intersects the Y-axis (the vertical axis) at $80,000 and then slants upward as the sales volume increases indicates which of the following statements is true? The total expense is a mixed cost that equals $8.25 when the sales volume is 1 unit. The total expense is purely a fixed expense that increases as the sales volume increases. The total expense is a mixed cost that includes a fixed component and a variable component. The total expense is purely a variable expense that increases as the sales volume increases. 1c. Which of the following statements is true with respect to the intersection of the orange and blue lines? It represents the company's break-even point, or that point where profits equal zero. It represents the sales volume where the company's total sales equal its total fixed expense. It represents the sales volume where the company's total sales equal its total variable expense. It represents the sales volume where the company's total sales equal its total expense. CVP Graph Salaries Description Fixed Expense Sales Total Expense 600K SOOK 400K 1- 300K 200K 100K OK OK 10K 20K 30K 40K SOK Sales Volume (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 2a. In the salary-based compensation scheme, what is the company's break-even point in unit sales? 30,000 units 13,044 units 25,000 units 35,000 units 2b. When the orange line is above the purple line and the gap between these two lines widens its suggests which of the following is true? The total profit decreases by the contribution margin per unit multiplied by each additional unit sold. U The total profit increases by the contribution margin per unit multiplied by each additional unit sold. The total profit increases by the selling price per unit multiplied by each additional unit sold. The total profit decreases by the selling price per unit multiplied by each additional unit sold. 2c. When the orange line is below the purple line and the gap between these two lines widens its suggests which of the following is true? The total loss decreases by the selling price per unit multiplied by the decline in unit sales. The total loss increases by the selling price per unit multiplied by the decline in unit sales. The total loss decreases by the contribution margin per unit multiplied by the decline in unit sales. The total loss increases by the contribution margin per unit multiplied by the decline in unit sales. CVP Graph Commissions Description Fixed Expense Sales Total Expense 600K CVP Graph Salaries Description Fixed Expense Sales Total Expense 600K SOOK SOOK 400K 400K Amount 300K Amount 300K 200K 200K 100K 100K OK OK OK 10K 40K SOK OK 10K 40K SOK 20K 30K Sales Volume 20K 30K Sales Volume (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 3a. Which of the following statements is true? 7 The break-even point in unit sales differs between the two compensation schemes, but the break-even point in dollar sales is the same in both compensation schemes. ? The break-even point in unit sales and dollar sales is the same in both compensation schemes. The break-even point in unit sales and dollar sales is higher in the salary-based compensation scheme. The break-even point in unit sales and dollar sales is higher in the commission-based compensation scheme. 3b. Which of the following statements is true? When unit sales are zero, the loss in the salary-based compensation scheme is greater than the loss in the commission-based scheme. ? When unit sales are zero, the loss in the salary-based compensation scheme is less than the loss in the commission-based scheme. ? When unit sales are zero, the loss in the salary-based compensation scheme equals the loss in the commission-based scheme. When unit sales are zero the company's profit is zero under both compensation schemes. 3c. Which of the following statements is true? When units sales equal 50,000 units the company's profit under both compensation schemes is equal to its sales minus total fixed expenses. ? When units sales equal 50,000 units the profit in the salary-based compensation scheme equals the profit in the commission-based scheme. When units sales equal 50,000 units the profit in the salary-based compensation scheme is less than the profit in the commission-based scheme. When units sales equal 50,000 units the profit in the salary-based compensation scheme is greater than the profit in the commission-based scheme. Profit Graph Commissions Description Profit 100K 50K 1. -50K OK 10K 20K 30K 40K 50K Sales Volume (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 4a. The point where the blue line intersects the Y-axis (the vertical axis) indicates which of the following statements is true? The company's total expense at all sales volumes between zero and 50,000 units is $80,000. The company's total fixed expense at all sales volumes between zero and 50,000 units is $80,000. The company's total variable expense at all sales volumes between zero and 50,000 units is $80,000. The company's total contribution margin at all sales volumes between zero and 50,000 units is $80,000. 4b. For each increase of one unit on the X-axis (the horizontal axis), the amount on the Y-axis (the vertical axis) increases by: The contribution margin per unit. The selling price per unit. The profit margin per unit. The variable expense per unit. 4c. If the selling price per unit decreased and the variable expense per unit and total fixed expense remained unchanged, then which of the following statements is true? The line shown in the profit graph would shift to a V-shape. The line shown in the profit graph would not change. The line shown in the profit graph would steepen. The line shown in the profit graph would flatten out. Profit Profit Graph Salaries Description Profit 100K SOK OK -50K -100K - 150K -200K OK 10K 20K 30K 40K SOK Sales Volume (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 5a. If the variable expense per unit decreased and the selling price per unit and total fixed expense remained unchanged, then which of the following statements is true? The line shown in the profit graph would shift to a V-shape. > The line shown in the profit graph would not change. The line shown in the profit graph would steepen. The line shown in the profit graph would flatten out. 5b. If the selling price per unit and the variable expense per unit both increased by $1 and the total fixed expense remained unchanged, then which of the following statements is true? The line shown in the profit graph would shift to a V-shape. The line shown in the profit graph would not change. The line shown in the profit graph would steepen. The line shown in the profit graph would flatten out. 5c. If the total fixed expense decreased and the selling price per unit and the variable expense per unit both remained unchanged, then which of the following statements is true? O The line shown in the profit graph would shift downward but its angle in relation to the X-axis (the horizontal axis) would not change. The line shown in the profit graph would shift downward and its angle in relation to the X-axis (the horizontal axis) would flatten out. The line shown in the profit graph would shift downward and its angle in relation to the X-axis (the horizontal axis) would steepen. The line shown in the profit graph would shift upward and its angle in relation to the X-axis (the horizontal axis) would steepen. TI Y... Profit Graph Salaries Option Commissions Salaries 100K SOK Amount -SOK - 100K - 150K OK 10K 20K 1 30K 4OK SOK Sales Volume (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 6a. Why is the angle of the dark blue line steeper than the angle of the light blue line? ? The contribution margin per unit in the salary-based compensation scheme is lower than the contribution margin per unit in the commission-based compensation scheme. The contribution margin per unit in the salary-based compensation scheme is higher than the contribution margin per unit in the commission-based compensation scheme. The total fixed expense in the salary-based compensation scheme is higher than the total fixed expense in the commission-based compensation scheme. The total fixed expense in the salary-based compensation scheme is lower than the total fixed expense in the commission-based compensation scheme. ? 6b. Which of the following statements explains how to compute the sales volume at which the two lines intersect? The difference between the two scenarios' total fixed expense divided by the difference between their respective contribution margins per unit. The difference between the two scenarios' total fixed expense plus the difference between their respective contribution margins per unit. ? The difference between the two scenarios' total fixed expense multiplied by the difference between their respective contribution margins per unit. ? The difference between the two scenarios' total fixed expense minus the difference between their respective contribution margins per unit. 6c. Which of the following equations explains how to compute the difference in profit between the two scenarios at a sales volume of 50,000 units? 2 (50,000 units - 40,000 units) * ($5.00 - $3.25) 2 (50,000 units - 40,000 units) ($5.00 - $3.25) (50,000 units - 40,000 units) * ($5.00 + $3.25) (50,000 units - 40,000 units) ($5.00 - $3.25) CVP Graph Commissions Description Fixed Expense Sales Total Expense 600K SOOK 400K 1. 300K 200K 100K OK OK 10K 20K 3OK 40K SOK Sales Volume (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 1a. The fact that the CVP graph's blue line is horizontal indicates which of the following statements is true? The average fixed expense per unit increases as the sales volume increases from 0 units to 50,000 units. The total fixed expense decreases as the sales volume increases from 0 units to 50,000 units. The total fixed expense increases as the sales volume increases from 0 units to 50,000 units. The total fixed expense does not change between a sales volume of O units and 50,000 units. 1b. The fact that the CVP graph's purple line intersects the Y-axis (the vertical axis) at $80,000 and then slants upward as the sales volume increases indicates which of the following statements is true? The total expense is a mixed cost that equals $8.25 when the sales volume is 1 unit. The total expense is purely a fixed expense that increases as the sales volume increases. The total expense is a mixed cost that includes a fixed component and a variable component. The total expense is purely a variable expense that increases as the sales volume increases. 1c. Which of the following statements is true with respect to the intersection of the orange and blue lines? It represents the company's break-even point, or that point where profits equal zero. It represents the sales volume where the company's total sales equal its total fixed expense. It represents the sales volume where the company's total sales equal its total variable expense. It represents the sales volume where the company's total sales equal its total expense. CVP Graph Salaries Description Fixed Expense Sales Total Expense 600K SOOK 400K 1- 300K 200K 100K OK OK 10K 20K 30K 40K SOK Sales Volume (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 2a. In the salary-based compensation scheme, what is the company's break-even point in unit sales? 30,000 units 13,044 units 25,000 units 35,000 units 2b. When the orange line is above the purple line and the gap between these two lines widens its suggests which of the following is true? The total profit decreases by the contribution margin per unit multiplied by each additional unit sold. U The total profit increases by the contribution margin per unit multiplied by each additional unit sold. The total profit increases by the selling price per unit multiplied by each additional unit sold. The total profit decreases by the selling price per unit multiplied by each additional unit sold. 2c. When the orange line is below the purple line and the gap between these two lines widens its suggests which of the following is true? The total loss decreases by the selling price per unit multiplied by the decline in unit sales. The total loss increases by the selling price per unit multiplied by the decline in unit sales. The total loss decreases by the contribution margin per unit multiplied by the decline in unit sales. The total loss increases by the contribution margin per unit multiplied by the decline in unit sales. CVP Graph Commissions Description Fixed Expense Sales Total Expense 600K CVP Graph Salaries Description Fixed Expense Sales Total Expense 600K SOOK SOOK 400K 400K Amount 300K Amount 300K 200K 200K 100K 100K OK OK OK 10K 40K SOK OK 10K 40K SOK 20K 30K Sales Volume 20K 30K Sales Volume (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 3a. Which of the following statements is true? 7 The break-even point in unit sales differs between the two compensation schemes, but the break-even point in dollar sales is the same in both compensation schemes. ? The break-even point in unit sales and dollar sales is the same in both compensation schemes. The break-even point in unit sales and dollar sales is higher in the salary-based compensation scheme. The break-even point in unit sales and dollar sales is higher in the commission-based compensation scheme. 3b. Which of the following statements is true? When unit sales are zero, the loss in the salary-based compensation scheme is greater than the loss in the commission-based scheme. ? When unit sales are zero, the loss in the salary-based compensation scheme is less than the loss in the commission-based scheme. ? When unit sales are zero, the loss in the salary-based compensation scheme equals the loss in the commission-based scheme. When unit sales are zero the company's profit is zero under both compensation schemes. 3c. Which of the following statements is true? When units sales equal 50,000 units the company's profit under both compensation schemes is equal to its sales minus total fixed expenses. ? When units sales equal 50,000 units the profit in the salary-based compensation scheme equals the profit in the commission-based scheme. When units sales equal 50,000 units the profit in the salary-based compensation scheme is less than the profit in the commission-based scheme. When units sales equal 50,000 units the profit in the salary-based compensation scheme is greater than the profit in the commission-based scheme. Profit Graph Commissions Description Profit 100K 50K 1. -50K OK 10K 20K 30K 40K 50K Sales Volume (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 4a. The point where the blue line intersects the Y-axis (the vertical axis) indicates which of the following statements is true? The company's total expense at all sales volumes between zero and 50,000 units is $80,000. The company's total fixed expense at all sales volumes between zero and 50,000 units is $80,000. The company's total variable expense at all sales volumes between zero and 50,000 units is $80,000. The company's total contribution margin at all sales volumes between zero and 50,000 units is $80,000. 4b. For each increase of one unit on the X-axis (the horizontal axis), the amount on the Y-axis (the vertical axis) increases by: The contribution margin per unit. The selling price per unit. The profit margin per unit. The variable expense per unit. 4c. If the selling price per unit decreased and the variable expense per unit and total fixed expense remained unchanged, then which of the following statements is true? The line shown in the profit graph would shift to a V-shape. The line shown in the profit graph would not change. The line shown in the profit graph would steepen. The line shown in the profit graph would flatten out. Profit Profit Graph Salaries Description Profit 100K SOK OK -50K -100K - 150K -200K OK 10K 20K 30K 40K SOK Sales Volume (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 5a. If the variable expense per unit decreased and the selling price per unit and total fixed expense remained unchanged, then which of the following statements is true? The line shown in the profit graph would shift to a V-shape. > The line shown in the profit graph would not change. The line shown in the profit graph would steepen. The line shown in the profit graph would flatten out. 5b. If the selling price per unit and the variable expense per unit both increased by $1 and the total fixed expense remained unchanged, then which of the following statements is true? The line shown in the profit graph would shift to a V-shape. The line shown in the profit graph would not change. The line shown in the profit graph would steepen. The line shown in the profit graph would flatten out. 5c. If the total fixed expense decreased and the selling price per unit and the variable expense per unit both remained unchanged, then which of the following statements is true? O The line shown in the profit graph would shift downward but its angle in relation to the X-axis (the horizontal axis) would not change. The line shown in the profit graph would shift downward and its angle in relation to the X-axis (the horizontal axis) would flatten out. The line shown in the profit graph would shift downward and its angle in relation to the X-axis (the horizontal axis) would steepen. The line shown in the profit graph would shift upward and its angle in relation to the X-axis (the horizontal axis) would steepen. TI Y... Profit Graph Salaries Option Commissions Salaries 100K SOK Amount -SOK - 100K - 150K OK 10K 20K 1 30K 4OK SOK Sales Volume (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 6a. Why is the angle of the dark blue line steeper than the angle of the light blue line? ? The contribution margin per unit in the salary-based compensation scheme is lower than the contribution margin per unit in the commission-based compensation scheme. The contribution margin per unit in the salary-based compensation scheme is higher than the contribution margin per unit in the commission-based compensation scheme. The total fixed expense in the salary-based compensation scheme is higher than the total fixed expense in the commission-based compensation scheme. The total fixed expense in the salary-based compensation scheme is lower than the total fixed expense in the commission-based compensation scheme. ? 6b. Which of the following statements explains how to compute the sales volume at which the two lines intersect? The difference between the two scenarios' total fixed expense divided by the difference between their respective contribution margins per unit. The difference between the two scenarios' total fixed expense plus the difference between their respective contribution margins per unit. ? The difference between the two scenarios' total fixed expense multiplied by the difference between their respective contribution margins per unit. ? The difference between the two scenarios' total fixed expense minus the difference between their respective contribution margins per unit. 6c. Which of the following equations explains how to compute the difference in profit between the two scenarios at a sales volume of 50,000 units? 2 (50,000 units - 40,000 units) * ($5.00 - $3.25) 2 (50,000 units - 40,000 units) ($5.00 - $3.25) (50,000 units - 40,000 units) * ($5.00 + $3.25) (50,000 units - 40,000 units) ($5.00 - $3.25)