Pharoah Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Pharoah's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. The following is a recent month's activity in the form of a cost-volume-profit income statement. Fare revenues (400 parcong flights) CIO 000

Pharoah Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Pharoah's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. The following is a recent month's activity in the form of a cost-volume-profit income statement. Fare revenues (400 parcong flights) CIO 000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 13MC: When fixed costs decrease and all other variables remain unchanged, the break-even point will...

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True or false: The breakeven point in dollars can be computed by dividing the contribution margin into the fixed operating costs.
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
Without resorting to computations, what is the total contribution margin at the break-even point?
how do you find the break even point? without knowing the contribution margin per unit
When the total fixed costs decrease, the contribution margin per unit ________. A. increases B. decreases C. decreases proportionately D. remains the same
How do you calculate Break-even Point? Select one: O a. Fixed cost/ Contribution per unit b. Contribution per unit/ Fixed cost c. Fixed cost/ Sales price per unit d. Fixed cost/ Variable cost per unit
The break-even point occurs when total contribution margin is less than total fixed costs. Ture False
What are the formulas for: 1. Contribution Cost 2. Break even cost
The break-even point in dollars is computed by dividing fixed costs by contribution margin ratio. fixed costs by contribution margin per unit. variable costs by contribution margin ratio. O variable costs by contribution margin per unit.
1. The most likely strategy to reduce the break-even point would be to a. Increase both the fixed costs and the contribution margin. b. Decrease both the fixed costs and the contribution margin. c. Decrease the fixed costs and increase the contribution margin. d. Increase the fixed costs and decrease the contribution margin.
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; decrease
1. Fill in the missing numbers in the table. Use the following questions to help fill in the missing numbers in the table: a. What is the total contribution margin? b. What is the total variable expense? c. How many units were sold? d. What is the per-unit variable expense? e. What is the per-unit contribution margin? 2. Answer the following questions about breakeven analysis: a. What is the breakeven point in units? b. What is the breakeven point in sales dollars? 3. Answer the following questions about target profit analysis and safety margin: a. How many units must the company sell in order to earn a profit of $48,000? b. What is the current margin of safety in units? c. What is the margin of safety in sales dollars? d. What is the margin of safety in percentage?