Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 10, Problem 11MC
When should a segment be dropped?
A. only when the decrease in total contribution margin is less than the decrease in fixed cost
B. only when the decrease in total contribution margin is equal to fixed cost
C. only when the increase in total contribution margin is more than the decrease in fixed cost
D. only when the decrease in total contribution margin is less than the decrease in variable cost
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When should a segment be dropped?
Group of answer choices
A-only when the decrease in total contribution margin is less than the decrease in fixed cost
B- only when the decrease in total contribution margin is equal to fixed cost
C-only when the increase in total contribution margin is more than the decrease in fixed cost
D-only when the decrease in total contribution margin is less than the decrease in variable cost
What is the result when the contribution margin ratio increases?
A.
Break-even point increases
B.
Fixed Cost decreases
C.
Break-even point decreases
D.
No effect on break-even points
When should a segment be dropped?
only when the decrease in total contribution margin is less than the decrease in fixed cost
only when the decrease in total contribution margin is equal to fixed cost
only when the increase in total contribution margin is more than the decrease in fixed
only when the decrease in total contribution margin is less than the decrease in variable cost
Chapter 10 Solutions
Principles of Accounting Volume 2
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Similar questions
- When fixed costs decrease and all other variables remain unchanged, the break-even point will _______________. A. remain unchanged B. increase C. decrease D. produce a lower contribution marginarrow_forwardWhen fixed costs increase and all other variables remain unchanged, the contribution margin will A. remain unchanged _____________________. B. increase C. decrease D. increase variable costs per unitarrow_forwardThe increase/decrease in variable cost from existing level to the new level is called as __cost. a.Standard b.Marginal c.Fixed d.Opportunityarrow_forward
- When the total fixed costs decrease, the contribution margin per unit ________. A. increases B. decreases C. decreases proportionately D. remains the samearrow_forwardWhen the level of activity increases, total fixed costs a. decrease. b. remain the same. c. increase. d. change, but the direction depends on the specific situation.arrow_forward:Total Fixed costs the level of activity none of the given is correct .a increases with .b does not change at all with .c decreases with .d does not change within a relevant rangearrow_forward
- The most likely strategy to reduce the breakeven point would be to fixed costs and contribution margin. A. increase; increaseB. decrease; increaseC. decrease; decreaseD. increase; decreasearrow_forwardWhich of the following is true about the changes in fixed cost? An increase in production will result in an increase in per unit fixed cost. A decrease in fixed cost will result in an increase in variable cost. An increase in production will result in a decrease in per unit fixed cost. A decrease in production will result in an increase in total fixed cost.arrow_forwardWhen fixed costs increase and all other variables remain unchanged, the contribution margin will ________. a.remain unchanged b.increase variable costs per unit c.decrease d.increasearrow_forward
- As the level of activity increases, how will a mixed cost behave? a. Increase in total but would decrease per unit b. Increase in total and per unit c. Increase per unit but would increase in total d. None of these e. Decrease in total and per unitarrow_forwardWhat is the term used to describe costs that increase in steps? A. Variable costs B. Fixed costs C. Mixed costs D. Semi-fixed costsarrow_forwardWhen the level of activity decreases, variable cost will increase or decrease ?arrow_forward
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