Question

In: Accounting

True or false 7. Market analysis determines the profit contributed by market segments of a company...

True or false
7. Market analysis determines the profit contributed by market segments of a company and can be analyzed using sales, cost and expenses.......
18. in preparing an operating budget, generally the sales budget begins the process because it estimates the expected level of sales.....
27. A favorable variance is when the actual is greater than standard.........
29. the total manufacturing cost variance is the difference between the total standard costs and the total actual cost for the units produced.......
45. Total variable cost remain the same in total dollar amount........
48. the margin of safety indicates how much sales must decrease before an operating loss occurs.......

Solutions

Expert Solution

7. True – The market segment profitablity is calculated with sales, cost and expenses. Variable costing approach is often used for market segment profitablity analysis.

18. True- Sales budget is the starting point for budget preparation. From sales budget, production budget is prepared based on inventory levels and then overheads budget.

27. False- A favorable variance is a variance when actual is less than standard. An unfavorable variances is a variance when actual is greater than standard.

29. True- Total manufacturing variance is calculated based on standard cost for actual production and actual cost.

45. False- Total variable cost increase or decrease in total amount depending on production or sales volume. Variable cost is constant at per unit level. Fixed cost is constant at overall level

48. True- Margin of safety is the difference between Actual sales – break even sales. If margin of safety is zero that is break even sales. At break even sales contribution is equal to fixed cost and there is no profit or no loss


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