The contribution income statement would require a firm to: Restructure its accounting system to accommodate activity-based costing. Separate costs into fixed and variable categories. Separate revenue into different categories. Round off amounts to the nearest dollar. Ignore some estimated fixed expenses, such as depreciation, that don't involve a cash outlay.

The contribution income statement would require a firm to: Restructure its accounting system to accommodate activity-based costing. Separate costs into fixed and variable categories. Separate revenue into different categories. Round off amounts to the nearest dollar. Ignore some estimated fixed expenses, such as depreciation, that don't involve a cash outlay.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 14MCQ

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Similar questions

Which of the following is NOT correct about Contribution concept? Select one: a. Contribution can be calculated by using total values or per-unit values. b. Contribution helps to recover fixed costs of the company. c. Contribution is the difference between sales and fixed costs. d. At break-even point, contribution is equal to fixed costs.
In making short-term business decisions, what should you do? a. Use a traditional costing approach. b. Focus on total costs. c. Separate variable from fixed costs. d. Focus only on quantitative factors.
The contribution margin approach helps managers in short-term decision making because it A. reports costs and revenues at present value B. reports only mixed costs C. treats fixed manufacturing overhead as product costs D. isolates costs by behavior
Accepting a special order will improve overall net operating income if the revenue from the special order exceeds: the contribution margin on the order. the incremental costs associated with the order. the variable costs associated with the order. O the sunk costs associated with the order.
In making short-term business decisions, what should you do? Use a traditional costing approach. Focus on total costs. Separate variable from fixed costs. Focus only on quantitative factors.
In making a short-term special decision, which of the following is MOST important? a. Use a conventional absorption costing method b. Focus on the total cost c. Separate variable and fixed costs d. Discount cash flow to their present values
Explain the concept of a contribution margin and describe how it differs from gross margin. Also, what is the significance of the contribution margin ratio, and how is the ratio useful in planning business operations? Provide examples.
.Which of the following is the format of the income statement that is MOST useful in decision-making? Select one: A.Contribution margin format B.Absorption costing format C.Single-step format D.Multiple-step format
Explain how a contribution margin income statement can be used to determine profitability.
3. Which of the following statements is most correct about step costs? they have the same behaviour as fixed costs between certain levels of activity they vary in direct proportion to changes in the level of activity they are sunk costs they are used in financial reporting and tax accounting purposes they are excluded from consideration in budgeting
Profitability changes may be simply calculated by using what kind of tool: sales price/volume/variable costs/fixed costs.
1. Activity based costing is likely a more advantageous costing methold versus traditonal costing, to facilliate which of the following type of analysis? a) analysis of service organization cost b) analysis of channel profitablity c) analysis of long term profitablity d) analysis for reduction selling price of all products? 2. A ___ is any factor that causes a change in the cost of an activity. a) activity based cost b) cost pool c) cost driver d) standard 3. Which of the following is no a basic cost category for indirect cost? a) inventory financing cost b) Volume related cost c) Product batch cost d) activity based cost