Questions from Managerial Accounting

Q: What is the variable cost ratio? The contribution margin ratio?

What is the variable cost ratio? The contribution margin ratio? How are the two ratios related?

Q: Define the term sales mix. Give an example to support your

Define the term sales mix. Give an example to support your definition.

Q: Explain how CVP analysis developed for single products can be used in

Explain how CVP analysis developed for single products can be used in a multiple-product setting.

Q: Since break-even analysis focuses on making zero profit, it

Since break-even analysis focuses on making zero profit, it is of no value in determining the units a firm must sell to earn a targeted profit. Do you agree or disagree with this statement? Why?

Q: How does targeted profit enter into the break-even units equation

How does targeted profit enter into the break-even units equation?

Q: Explain how a change in sales mix can change a company’s break

Explain how a change in sales mix can change a company’s break-even point.

Q: Define the term margin of safety. Explain how it can be

Define the term margin of safety. Explain how it can be used as a crude measure of operating risk.

Q: Explain what is meant by the term operating leverage. What impact

Explain what is meant by the term operating leverage. What impact does increased leverage have on risk?

Q: Why is a declining margin of safety over a period of time

Why is a declining margin of safety over a period of time an issue of concern to managers?

Q: Slaps hot Company makes ice hockey sticks and sold 1,880

Slaps hot Company makes ice hockey sticks and sold 1,880 sticks during the month of June at a total cost of $433,000. Each stick sold at a price of $400. Slaps hot also incurred two types of selling c...