Question 1

The Excelsior Company has three salespersons. Average sales price per unit sold, average variable manufacturing costs per unit, and number of units sold for each salesperson are shown below.   
Commissions are earned according to the following schedule:   
Prepare a contribution by salesperson report.

Accepted Answer

The answer of The Excelsior Company has three salespersons. Average...

Question 2

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the quantity factor.

Accepted Answer

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the sales mix variance, not the quantity factor. The quantity factor typically refers to the impact of a change in the quantity sold on total contribution margin, separate from changes in sales price or unit cost.

Question 3

The relative distribution of sales among various products sold is referred to as the:
A) by-product mix
B) joint product mix
C) profit mix
D) sales mix

Accepted Answer

Sales mix refers to the relative distribution of sales among various products sold. A is incorrect as by-product mix refers to the products obtained incidentally or in addition to the main product. B is incorrect as joint product mix refers to the products that are produced together as a result of a single production process. C is incorrect as profit mix is not a commonly used term in accounting or finance.

Question 4

The following data are for Trendy Fashion Apparel:  
Determine the contribution margin for: 
(a) Skirts 
(b) the South Region.

Accepted Answer

The answer of The following data are for Trendy Fashion...

Question 5

The contribution margin ratio is computed as:
A) sales divided by contribution margin
B) contribution margin divided by sales
C) contribution margin divided by cost of sales
D) contribution margin divided by variable cost of sales

Accepted Answer

The contribution margin ratio is defined as the percentage of each sales dollar that remains after variable expenses have been subtracted. This can be calculated by dividing the contribution margin by the total sales. Therefore, the correct option is B where contribution margin is divided by sales.

Question 6

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the unit price or unit cost factor.

Accepted Answer

The statement correctly defines the concept of the unit price or unit cost factor in contribution margin analysis.

Question 7

Contribution margin reporting can be beneficial for analyzing which of the following?
A) sales personnel
B) products
C) sales territory
D) all of the above

Accepted Answer

Contribution margin reporting can provide insight into the profitability of specific products or sales territories, as well as the effectiveness of sales personnel in generating revenue. Therefore, all of the above options can benefit from contribution margin analysis.

Question 8

In contribution margin analysis, the unit price or unit cost factor is computed as the difference between the actual unit price or unit cost and the planned unit price or unit cost, multiplied by the actual quantity sold.

Accepted Answer

This statement accurately describes the computation of the unit price or unit cost factor in contribution margin analysis.

Question 9

The systematic examination of differences between planned and actual contribution margins is termed contribution margin analysis.

Accepted Answer

This is a true statement. Contribution margin analysis involves looking at the difference between the planned or budgeted contribution margin (sales revenue minus the variable costs of goods sold) and the actual contribution margin achieved. It is a way to analyze and evaluate the performance of a business and identify areas for improvement.

Question 10

Management should focus its sales and production efforts on the product or products that will provide
A) the highest sales revenue
B) the lowest product costs
C) the maximum contribution margin
D) the lowest direct labor hours

Accepted Answer

Maximizing the contribution margin will ensure that the product is generating the highest amount of profit after all variable costs have been deducted. This will give the company the highest return on investment and ultimately increase profitability. Sale revenue and product costs are important factors to consider, but they do not directly impact profitability like contribution margin. Direct labor hours may also be important to consider for production efficiency, but it does not necessarily guarantee profitability.

Question 11

In the contribution margin analysis, the effect of a change in the number of units sold, assuming no change in unit sales price or unit cost, is referred to as the:
A) sales factor
B) cost of goods sold factor
C) quantity factor
D) price factor

Accepted Answer

The effect of a change in the number of units sold, assuming no change in unit sales price or unit cost, is referred to as the quantity factor. This factor measures the impact of increased or decreased quantity on the contribution margin and ultimately on the company's profitability. The other options (A, B, and D) do not specifically refer to the effect of a change in quantity.

Question 12

In contribution margin analysis, the effect of a difference in the number of units sold, assuming no change in unit sales price or cost, is termed the unit price or unit cost factor.

Accepted Answer

In contribution margin analysis, the effect of a difference in the number of units sold, assuming no change in unit sales price or cost, is termed the sales volume factor, not the unit price or unit cost factor.

Question 13

In contribution margin analysis, the quantity factor is computed as:
A) the increase or decrease in the number of units sold multiplied by the planned unit sales price or unit cost
B) the increase or decrease in unit sales price or unit cost multiplied by the planned number of units to be sold
C) the increase or decrease in the number of units sold multiplied by the actual unit sales price or unit cost
D) the increase or decrease in the unit sales price or unit cost multiplied by the actual number of units sold

Accepted Answer

The quantity factor in contribution margin analysis is calculated as the change in the number of units sold (compared to the planned sales volume) multiplied by the planned unit sales price or unit cost. This factor helps to determine the impact of changes in sales volume on overall profitability.

Question 14

In contribution margin analysis, the unit price or unit cost factor is computed as the difference between the actual quantity sold and the planned quantity sold, multiplied by the planned unit sales price or unit cost.

Accepted Answer

The answer of In contribution margin analysis, the unit price...

Question 15

In contribution margin analysis, the unit price or unit cost factor is computed as:
A) the difference between the actual unit price or unit cost and the planned unit price or cost, multiplied by the planned quantity sold
B) the difference between the actual unit price or unit cost and the planned unit price or cost, multiplied by the actual quantity sold
C) the difference between the actual quantity sold and the planned quantity sold, multiplied by the planned unit sales price or unit cost
D) the difference between the actual quantity sold and the planned quantity sold, multiplied by the actual unit sales price or unit cost

Accepted Answer

The answer of In contribution margin analysis, the unit price...

Question 16

In contribution margin analysis, the increase or decrease in unit sales price or unit cost on the number of units sold is referred to as the:
A) sales factor
B) cost of goods sold factor
C) quantity factor
D) unit price or unit cost factor

Accepted Answer

The answer of In contribution margin analysis, the increase or...

Question 17

In contribution margin analysis, the quantity factor is computed as the difference between actual quantity sold and the planned quantity sold, multiplied by the planned unit sales price or unit cost.

Accepted Answer

The answer of In contribution margin analysis, the quantity factor...

Question 18

If sales totaled $200,000 for the current year (10,000 units at $20 each) and planned sales totaled $212,500 (12,500 units at $17 each), the effect of the unit price factor on the change in sales is a:
A) $30,000 increase
B) $12,500 increase
C) $7,500 increase
D) $30,000 decrease

Accepted Answer

The answer of If sales totaled $200,000 for the current...

Question 19

A change in the amount of sales can be due to either a change in the units sold or a change in price or both.

Accepted Answer

The answer of A change in the amount of sales...

Question 20

In contribution margin analysis, the effect of a difference in the number of units sold, assuming no change in unit sales price or cost, is termed the quantity factor.

Accepted Answer

The answer of In contribution margin analysis, the effect of...

Quiz 6: Variable Costing for Management Analysis

The Excelsior Company has three salespersons. Average sales price per unit sold, average variable manufacturing costs per unit, and number of units sold for each salesperson are shown below. Commissions are earned according to the following schedule: Prepare a contribution by salesperson report.

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the quantity factor.

The relative distribution of sales among various products sold is referred to as the:

The following data are for Trendy Fashion Apparel: Determine the contribution margin for: (a) Skirts (b) the South Region.

The contribution margin ratio is computed as:

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the unit price or unit cost factor.

Contribution margin reporting can be beneficial for analyzing which of the following?

In contribution margin analysis, the unit price or unit cost factor is computed as the difference between the actual unit price or unit cost and the planned unit price or unit cost, multiplied by the actual quantity sold.

The systematic examination of differences between planned and actual contribution margins is termed contribution margin analysis.

Management should focus its sales and production efforts on the product or products that will provide

In the contribution margin analysis, the effect of a change in the number of units sold, assuming no change in unit sales price or unit cost, is referred to as the:

In contribution margin analysis, the effect of a difference in the number of units sold, assuming no change in unit sales price or cost, is termed the unit price or unit cost factor.

In contribution margin analysis, the quantity factor is computed as:

In contribution margin analysis, the unit price or unit cost factor is computed as the difference between the actual quantity sold and the planned quantity sold, multiplied by the planned unit sales price or unit cost.

In contribution margin analysis, the unit price or unit cost factor is computed as:

In contribution margin analysis, the increase or decrease in unit sales price or unit cost on the number of units sold is referred to as the:

In contribution margin analysis, the quantity factor is computed as the difference between actual quantity sold and the planned quantity sold, multiplied by the planned unit sales price or unit cost.

If sales totaled $200,000 for the current year (10,000 units at $20 each) and planned sales totaled $212,500 (12,500 units at $17 each) , the effect of the unit price factor on the change in sales is a:

A change in the amount of sales can be due to either a change in the units sold or a change in price or both.

In contribution margin analysis, the effect of a difference in the number of units sold, assuming no change in unit sales price or cost, is termed the quantity factor.