week 3
Week 2: Assignment from the Textbook
Ex. 20.1
Listed below are nine technical accounting terms introduced in this chapter:
Variable costs Relevant range Contribution margin
Break-even point Fixed costs Semivariable costs
Economies of scale Sales mix Unit contribution margin
Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer "None" if the statement does not correctly describe any of the terms.
a. The level of sales at which revenue exactly equals costs and expenses.
Break-even point
b. Costs that remain unchanged despite changes in sales volume.
Fixed costs
c. The span over which output is likely to vary and assumptions about cost behavior generally remain valid.
Relevant range
d. Sales revenue less variable costs and expenses.
Contribution margin
e. Unit sales price minus variable cost per unit.
Unit contribution margin
f. The reduction in unit cost achieved from a higher level of output.
Economies of sale
g. Costs that respond to changes in sales volume by less than a proportionate amount.
Semi-variable costs
h. Operating income less variable costs.
None
Ex. 20.7
MURDER TO GO! writes and manufactures murder mystery parlor games that it sells to retail stores. The following is per-unit information relating to the manufacture and sale of this product:
Unit sales price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30
Variable cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Fixed costs per year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360,000
Determine the following, showing as part of your answer the formula that you used in your computation.
For example, the formula used to
Ex. 20.1
Listed below are nine technical accounting terms introduced in this chapter:
Variable costs Relevant range Contribution margin
Break-even point Fixed costs Semivariable costs
Economies of scale Sales mix Unit contribution margin
Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer "None" if the statement does not correctly describe any of the terms.
a. The level of sales at which revenue exactly equals costs and expenses.
Break-even point
b. Costs that remain unchanged despite changes in sales volume.
Fixed costs
c. The span over which output is likely to vary and assumptions about cost behavior generally remain valid.
Relevant range
d. Sales revenue less variable costs and expenses.
Contribution margin
e. Unit sales price minus variable cost per unit.
Unit contribution margin
f. The reduction in unit cost achieved from a higher level of output.
Economies of sale
g. Costs that respond to changes in sales volume by less than a proportionate amount.
Semi-variable costs
h. Operating income less variable costs.
None
Ex. 20.7
MURDER TO GO! writes and manufactures murder mystery parlor games that it sells to retail stores. The following is per-unit information relating to the manufacture and sale of this product:
Unit sales price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30
Variable cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Fixed costs per year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360,000
Determine the following, showing as part of your answer the formula that you used in your computation.
For example, the formula used to