Management Accounting - Study Mode
[#421] In cost benefit approach, type of costs include
Correct Answer
(D) all of above
Explanation
Solution: In cost benefit approach, type of costs include cost of ongoing operations, investments in physical assets and training of managers. A cost-benefit analysis is a process businesses use to analyze decisions. The business or analyst sums the benefits of a situation or action and then subtracts the costs associated with taking that action.
[#422] If contribution per unit is $900 and number of units sold is $70, then contribution margin will be
Correct Answer
(C) $63,000
Explanation
Solution: Contribution margin = Contribution per unit × Number of units sold = $900 × $70 = $63,000.
[#423] If selling price is $20 and number of units sold are 800, then revenue is equal to
Correct Answer
(A) $16,000
Explanation
Solution: Revenue = Units sold × Selling price = 800 × $20 = $16,000.
[#424] If total revenue is $10000 and total variable cost is $4000, then contribution margin would be
Correct Answer
(B) $14,000
Explanation
Solution: Contribution margin = Total revenue + Total variable cost = $10000 + $4000 = $14,000.
[#425] Total revenues is subtracted from total variable costs to calculate
Correct Answer
(C) contribution margin
Explanation
Solution: Total revenues is subtracted from total variable costs to calculate contribution margin. Contribution margin is a product's price minus all associated variable costs, resulting in the incremental profit earned for each unit sold. The total contribution margin generated by an entity represents the total earnings available to pay for fixed expenses and to generate a profit.