Questions from Management Accounting

Q: If an entity has a mixed cost function, a 10 per

If an entity has a mixed cost function, a 10 per cent increase in sales volume should increase income by more than 10 per cent. Explain why.

Q: Can the margin of safety ever be negative? Explain your answer

Can the margin of safety ever be negative? Explain your answer.

Q: Describe three uses for CVP analysis.

Describe three uses for CVP analysis.

Q: Venture Buses operates throughout the south-eastern suburbs of Melbourne,

Venture Buses operates throughout the south-eastern suburbs of Melbourne, with its depot located in Cheltenham. Every day, fuel is delivered and stored in tanks located in the depot. This fuel is used...

Q: Explain how CVP analysis can be used to make decisions about increases

Explain how CVP analysis can be used to make decisions about increases in advertising costs.

Q: Under what circumstances will managers want sensitivity analysis results relating to a

Under what circumstances will managers want sensitivity analysis results relating to a CVP analysis?

Q: How do different cost structures affect the breakeven point and operating leverage

How do different cost structures affect the breakeven point and operating leverage?

Q: Give an example of how a business can reduce variable costs by

Give an example of how a business can reduce variable costs by increasing fixed costs.

Q: Identify an industry that would have a high level of operating leverage

Identify an industry that would have a high level of operating leverage. Briefly comment on your selection.

Q: Explain how to calculate a weighted average contribution margin per unit.

Explain how to calculate a weighted average contribution margin per unit.