Podcast
Questions and Answers
What is the formula for contribution margin ratio?
What is the formula for contribution margin ratio?
- Variable Costs / Sales Revenue
- Net Income / Sales Revenue
- Contribution Margin / Sales Revenue (correct)
- Fixed Costs / Sales Revenue
If a company's break-even sales level is $100,000 and their actual sales amount to $120,000, what is the margin of safety?
If a company's break-even sales level is $100,000 and their actual sales amount to $120,000, what is the margin of safety?
- $120,000
- $40,000
- $20,000 (correct)
- $100,000
In terms of operating leverage, what does it indicate if a company has high fixed costs and low variable costs?
In terms of operating leverage, what does it indicate if a company has high fixed costs and low variable costs?
- No impact on operating leverage
- High operating leverage and less risky (correct)
- Moderate operating leverage and moderate risk
- Low operating leverage and more risky
What is the main factor to consider when choosing among alternatives using differential analysis?
What is the main factor to consider when choosing among alternatives using differential analysis?
Which of the following best describes an incremental cost?
Which of the following best describes an incremental cost?
What characterizes a cost as avoidable when considering different alternatives?
What characterizes a cost as avoidable when considering different alternatives?
What are the additional decision factors when deciding to drop unprofitable segments?
What are the additional decision factors when deciding to drop unprofitable segments?
What does performance benchmarking primarily measure?
What does performance benchmarking primarily measure?
Which type of benchmarking involves comparing metrics from different areas of the business?
Which type of benchmarking involves comparing metrics from different areas of the business?
What is the focus of competitive benchmarking?
What is the focus of competitive benchmarking?
Which metric is NOT typically used in performance benchmarking?
Which metric is NOT typically used in performance benchmarking?
In what way does strategic benchmarking differ from competitive benchmarking?
In what way does strategic benchmarking differ from competitive benchmarking?
What is the formula for calculating the contribution margin ratio?
What is the formula for calculating the contribution margin ratio?
In break-even analysis, what does the term 'margin of safety' refer to?
In break-even analysis, what does the term 'margin of safety' refer to?
Which of the following statements is true about operating leverage?
Which of the following statements is true about operating leverage?
What is the break-even point in terms of units?
What is the break-even point in terms of units?
How is the contribution margin per unit calculated?
How is the contribution margin per unit calculated?
Which of the following best describes the concept of break-even in a business setting?
Which of the following best describes the concept of break-even in a business setting?
