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Hello tutor Please answer it correctly asap. thank you so much Exercise 4-1 Fill in the blanks (n x 1) Write the word or phrase
Hello tutor Please answer it correctly asap. thank you so much
Exercise 4-1 Fill in the blanks (n x 1) Write the word or phrase referred to by the statement given below. Break - even analysis 1. It gives management a feel for how close projected operations are to the company's break-even point. 2. Another name for desired profit. 3. A profitability ratio which indicates the contribution earned with respect to sales. 4. An alternative breakeven graph which does not show the fixed cost line. 5. The amount of sales in excess of variable costs and expenses. 6. This kind of analysis will use multiple what-if scenarios to model a range of possible outcomes. 7. The point of equilibrium between two cost scenarios which can be expressed in units or in peso amount. 8. Costs that remain unchanged regardless of the number of output a company produces. 9. Refers to a business or industry that requires a large amount of labor to produce its goods or services. 10. This describes a company that has more fixed costs in their cost structure.Exercise 4-2 Instruction: Encircle T if the statement is true; encircle F If the statement is false. T F 1. The amount available from each unit of sales to cover fixed cost and profit is the unit variable cost. T F 2. If direct material cost per unit increases, the breakeven point will decrease. T F 3. If a business sells two products, it is not possible to estimate the breakeven point. T F 4. A low operating leverage is normal for highly automated industries. T F 5. Fixed costs are constant in total while variable costs are constant per unit. T F 6. Companies with high operating leverage have high contribution margin ratios. T F 7. When the margin of safety is low, the degree of operating leverage is high. T F B. Contribution margin does not provide an insight into the profit potential of a company. T F 9. After the level of volume exceeds the breakeven point. the total contribution margin exceeds the total fixed costs and expenses. T F 10. Increases in fixed costs increase the breakeven point. T F 11. After reaching the break-even point, each peso of contribution margin s a peso of pre-tax profit. T F 12. On a conventional CVP graph, the total variable cost line intersects the y-axis at zero. T F 13. On a traditional CVP graph, the total fixed cost line parallels the y-axis. T F 14. In a multi-product company, CVP analysis makes the assumption that sales mix is constant. T F 15. There is an inverse relationship between degree of operating leverage and The margin of safety. 133Step by Step Solution
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