Podcast
Questions and Answers
What is the sales manager proposing to change regarding the sales staff's compensation?
What is the sales manager proposing to change regarding the sales staff's compensation?
- From $10,000 per year to $15 per Phone sold
- From flat salaries to commission basis (correct)
- From commission basis to flat salaries
- From $15 per Phone sold to $10,000 per year
According to CVP analysis assumptions, what is one of the factors that affect costs?
According to CVP analysis assumptions, what is one of the factors that affect costs?
- Organizational culture
- Market competition
- Sales mix variability
- Changes in activity level (correct)
What does the Margin of Safety measure?
What does the Margin of Safety measure?
- Cushion provided by a level of sales (correct)
- Quality of products sold
- Difference between fixed and variable costs
- Expected profit percentage
If the sales manager's confident increase in annual sales by 15% is achieved, what will be the new annual sales amount?
If the sales manager's confident increase in annual sales by 15% is achieved, what will be the new annual sales amount?
In the context of Margin of Safety, what does 'break-even point' refer to?
In the context of Margin of Safety, what does 'break-even point' refer to?
What formula is used to calculate the margin of safety ratio?
What formula is used to calculate the margin of safety ratio?
Which assumption of CVP analysis states that all units produced are sold?
Which assumption of CVP analysis states that all units produced are sold?
If the Margin of Safety in dollars for a company is $300,000 and the Expected Sales are $900,000, what is the margin of safety ratio?
If the Margin of Safety in dollars for a company is $300,000 and the Expected Sales are $900,000, what is the margin of safety ratio?
How does the sales manager believe changing to a commission basis will impact annual sales?
How does the sales manager believe changing to a commission basis will impact annual sales?
'Margin of Safety' can be expressed as __________.
'Margin of Safety' can be expressed as __________.
Flashcards
Margin of Safety
Margin of Safety
The amount of sales revenue that exceeds the break-even point.
Break-Even Point
Break-Even Point
Point where total revenue equals total cost, resulting in zero profit.
Margin of Safety Ratio
Margin of Safety Ratio
The percentage of sales above the break-even point.
Changes in Activity Level
Changes in Activity Level
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Commission Basis
Commission Basis
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All Units Produced are Sold
All Units Produced are Sold
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How Commission Basis Impacts Sales
How Commission Basis Impacts Sales
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CVP Analysis
CVP Analysis
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New Annual Sales Amount
New Annual Sales Amount
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Calculating the Margin of Safety Ratio
Calculating the Margin of Safety Ratio
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