A scatter diagram is a graph of unit volume and cost data where each point reflects _____ produced.

A scatter diagram is a graph of unit volume and cost data where each point reflects _____ produced.

multiple choice

    unit costs and total units
    total costs and total units
    total costs and units Correct
    costs and total units

Explanation

Knowledge Check 01
 
A scatter diagram is a graph of unit volume and cost data where each point reflects total costs and units produced during the period.
 

Cost-volume-profit analysis identifies and measures costs using their _____ components:

multiple choice

    fixed
    variable
    mixed
    fixed and variable Correct

Explanation

Knowledge Check 01
 
Cost-volume-profit analysis identifies and measures costs using their fixed and variable components.
 

Companies can use _____ analysis to predict income based on various changes in fixed or variable costs, selling price and volume.

multiple choice

    income
    sales
    CVP Correct
    margin of safety

Explanation

Knowledge Check 01
 
Companies can use CVP analysis based on different estimates of fixed cost, variable cost, selling price and/or volume to determine income.

 

Compute sales based on the following information.
 
Sales     $ ?
Variable costs     30,000
Fixed costs     5,000
Target income     $ 65,000

 
multiple choice

    $100,000 Correct
    $30,000
    $35,000
    $70,000

Explanation

Knowledge Check 01
   
Adding fixed costs and target income, we get the contribution margin of $70,000. Contribution margin of $70,000 plus variable costs of $30,000 equals sales of $100,000.