ACCT2101 Chapter 5

Mixed costs consist of a:

• variable- cost component and a fixed-cost component

• fixed-cost component and a product-cost component

• period-cost component and a product-cost component

• variable-cost component and a period-cost compnent

Which of the following is not involved in CVP analysis?

• Sales mix

• Unit selling price

• Fixed costs per unit

• Volume or level of activity (quantity)

When comparing GAAP income statement to a CVP income statement:

• net income will always be greater on the GAAP statement

• net income will always be less on the GAAP statement

• net income will always be identical on both

• net income will be greater or less depending on the sales volume

Contribution Margin:

• is revenue remaining after deducting fixed and variable costs

• may not be expressed as unit contribution margin

• is sales less cost of goods sold

• is revenue remaining after deducting variable costs and may be expressed as unit contribution margin

The mathematical equation for computing required sales to obtain target net income is:

• variable costs + target net income

• variable costs + fixed costs + target net income

• fixed costs + target net income

• no correct answer is given