Question 1

If variable selling and administrative expenses totaled $124,000 for the year (80,000 units at $1.55 each)and the planned variable selling and administrative expenses totaled $136,500 (78,000 units at $1.75 each),the effect of the quantity factor on the change in contribution margin is:
A) $3,000 increase
B) $3,500 decrease
C) $3,000 decrease
D) $3,500 increase

Accepted Answer

The answer of If variable selling and administrative expenses totaled...

Question 2

In contribution margin analysis,the effect of a difference in unit sales price or unit cost on the number of units sold is termed the unit price or unit cost factor.

Accepted Answer

This is true. The unit price or unit cost factor refers to the impact that a change in the sales price or cost per unit has on the number of units that a company can sell. This is an important factor to consider in contribution margin analysis, as it helps to determine the profitability of different pricing and cost strategies.

Question 3

If variable cost of goods sold totaled $80,000 for the year (16,000 units at $5.00 each)and the planned variable cost of goods sold totaled $86,250 (15,000 units at $5.75 each),the effect of the quantity factor on the change in contribution margin is:
A) $5,000 decrease
B) $5,000 increase
C) $5,750 increase
D) $5,750 decrease

Accepted Answer

The contribution margin per unit can be calculated as follows:
- Current contribution margin per unit = Price per unit - Variable cost per unit = $5.00 - $0.00 = $5.00
- Planned contribution margin per unit = Price per unit - Variable cost per unit = $5.75 - $0.00 = $5.75

Using these figures, the change in the contribution margin due to the quantity factor can be calculated as follows:
- Current contribution margin = 16,000 units x $5.00 = $80,000
- Planned contribution margin = 15,000 units x $5.75 = $86,250
- Change in contribution margin = Planned contribution margin - Current contribution margin = $86,250 - $80,000 = $6,250
- However, this increase in contribution margin is due to a higher price per unit rather than a higher quantity of units sold. Therefore, we need to adjust for the price increase to isolate the effect of the quantity factor.
- Adjusted planned contribution margin = 15,000 units x $5.00 = $75,000
- Adjusted change in contribution margin = Adjusted planned contribution margin - Current contribution margin = $75,000 - $80,000 = -$5,000

Therefore, the effect of the quantity factor on the change in contribution margin is a decrease of $5,000. The correct answer is D.

Question 4

If variable cost of goods sold totaled $90,000 for the year (18,000 units at $5.00 each)and the planned variable cost of goods sold totaled $86,400 (16,000 units at $5.40 each),the effect of the unit cost factor on the change in contribution margin is:
A) $6,400 decrease
B) $6,400 increase
C) $7,200 increase
D) $7,200 decrease

Accepted Answer

The unit cost factor is calculated as the difference in unit cost multiplied by the actual units sold: ($5.40 - $5.00) * 18,000 = $7,200 increase.

Question 5

If variable selling and administrative expenses totaled $120,000 for the year (80,000 units at $1.50 each)and the planned variable selling and administrative expenses totaled $136,500 (78,000 units at $1.75 each),the effect of the unit cost factor on the change in contribution margin is:
A) $19,500 decrease
B) $19,500 increase
C) $20,000 decrease
D) $20,000 increase

Accepted Answer

The answer of If variable selling and administrative expenses totaled...

Question 6

In contribution margin analysis,the quantity factor is computed as the difference between actual quantity sold and the planned quantity sold,multiplied by the planned unit sales price or unit cost.

Accepted Answer

This statement accurately describes the calculation of the quantity factor in contribution margin analysis.

Question 7

If sales totaled $200,000 for the current year (10,000 units at $20 each)and planned sales totaled $212,500 (12,500 units at $17 each),the effect of the unit price factor on the change in sales is a:
A) $30,000 increase
B) $12,500 increase
C) $7,500 increase
D) $30,000 decrease

Accepted Answer

The unit price factor is calculated by taking the difference in the selling price per unit and multiplying it by the actual units sold. The actual selling price is $20, and the planned selling price is $17, so the difference is $3. Multiply this by the actual units sold (10,000 units), resulting in a $30,000 increase.

Question 8

A change in the amount of sales can be due to either a change in the units sold or a change in price or both.

Accepted Answer

A change in the amount of sales can be due to a change in the units sold or a change in price, or a combination of both factors.

Question 9

If variable cost of goods sold totaled $80,000 for the year (16,000 units at $5.00 each)and the planned variable cost of goods sold totaled $86,250 (15,000 units at $5.75 each),the effect of the unit cost factor on the change in contribution margin is:
A) $12,000 increase
B) $5,750 decrease
C) $12,000 decrease
D) $5,750 increase

Accepted Answer

The answer of If variable cost of goods sold totaled...

Question 10

In contribution margin analysis,the increase or decrease in unit sales price or unit cost on the number of units sold is referred to as the:
A) sales factor
B) cost of goods sold factor
C) quantity factor
D) unit price or unit cost factor

Accepted Answer

The increase or decrease in unit sales price or unit cost on the number of units sold is referred to as the unit price or unit cost factor. This factor directly affects the contribution margin, which is the difference between the unit sales price and the unit variable cost. Any change in the unit price or unit cost will impact the contribution margin, and hence, it is an important factor to consider in contribution margin analysis.

Question 11

In contribution margin analysis,the effect of a difference in unit sales price or unit cost on the number of units sold is termed the quantity factor.

Accepted Answer

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the sales mix variance, not the quantity factor. The quantity factor typically refers to the impact of a change in the quantity sold on total contribution margin, separate from changes in sales price or unit cost.

Question 12

In the contribution margin analysis,the effect of a change in the number of units sold,assuming no change in unit sales price or unit cost,is referred to as the:
A) sales factor
B) cost of goods sold factor
C) quantity factor
D) price factor

Accepted Answer

The effect of a change in the number of units sold, assuming no change in unit sales price or unit cost, is referred to as the quantity factor. This factor represents the change in contribution margin resulting from a change in the quantity of units sold.

Question 13

If sales totaled $800,000 for the year (80,000 units at $10.00 each)and the planned sales totaled $799,500 (78,000 units at $10.25 each),the effect of the quantity factor on the change in sales is:
A) $20,500 increase
B) $20,000 decrease
C) $20,500 decrease
D) $20,000 increase

Accepted Answer

The quantity factor decreased by 2,000 units (80,000 - 78,000), and each unit was sold for $10.00. Therefore, the effect of the quantity factor on the change in sales is a decrease of 2,000 * $10.00 = $20,000.

Question 14

Which of the following causes the difference between the planned and actual contribution margin?
A) an increase or decrease in the amount of sales
B) an increase in the amount of variable costs and expenses
C) a decrease in the amount of variable costs and expenses
D) all of the above

Accepted Answer

The difference between the planned and actual contribution margin can be caused by changes in sales volume, increases, or decreases in variable costs and expenses. All these factors directly affect the contribution margin by altering either the revenue side, the cost side, or both.

Question 15

If sales totaled $800,000 for the year (80,000 units at $10.00 each)and the planned sales totaled $799,500 (78,000 units at $10.25 each),the effect of the unit price factor on the change in sales is:
A) $19,500 decrease
B) $19,500 increase
C) $20,000 decrease
D) $20,000 increase

Accepted Answer

The answer of If sales totaled $800,000 for the year...

Question 16

In contribution margin analysis,the quantity factor is computed as:
A) the increase or decrease in the number of units sold multiplied by the planned unit sales price or unit cost
B) the increase or decrease in unit sales price or unit cost multiplied by the planned number of units to be sold
C) the increase or decrease in the number of units sold multiplied by the actual unit sales price or unit cost
D) the increase or decrease in the unit sales price or unit cost multiplied by the actual number of units sold

Accepted Answer

The quantity factor in contribution margin analysis is the change in the number of units sold, multiplied by the planned unit sales price or unit cost. This calculation helps determine how much of the change in contribution margin is due to changes in quantity sold versus changes in unit price or unit cost. Therefore, option A is the correct choice.

Question 17

If variable cost of goods sold totaled $90,000 for the year (18,000 units at $5.00 each)and the planned variable cost of goods sold totaled $86,400 (16,000 units at $5.40 each),the effect of the quantity factor on the change in contribution margin is:
A) $10,800 decrease
B) $10,800 increase
C) $10,000 increase
D) $10,000 decrease

Accepted Answer

The quantity factor caused a decrease in contribution margin of $10,800. This is because the actual variable cost of goods sold was $90,000, while the planned variable cost of goods sold was $86,400. The difference of $3,600 is due to the fact that the actual number of units sold was 18,000, while the planned number of units sold was 16,000. This difference of 2,000 units, multiplied by the variable cost per unit of $5.40, results in a decrease in contribution margin of $10,800.

Question 18

In contribution margin analysis,the unit price or unit cost factor is computed as the difference between actual quantity sold and the planned quantity sold,multiplied by the planned unit sales price or unit cost.

Accepted Answer

In contribution margin analysis, the unit contribution margin is computed as the difference between the unit selling price and the unit variable cost, not based on the difference between actual and planned quantities sold.

Question 19

In contribution margin analysis,the unit price or unit cost factor is computed as:
A) the difference between the actual unit price or unit cost and the planned unit price or cost,multiplied by the planned quantity sold
B) the difference between the actual unit price or unit cost and the planned unit price or cost,multiplied by the actual quantity sold
C) the difference between the actual quantity sold and the planned quantity sold,multiplied by the planned unit sales price or unit cost
D) the difference between the actual quantity sold and the planned quantity sold,multiplied by the actual unit sales price or unit cost

Accepted Answer

The unit price or unit cost factor in contribution margin analysis measures the impact of actual prices or costs compared to planned prices or costs on the overall contribution margin. It is computed by multiplying the difference between the actual unit price/cost and planned unit price/cost by the actual quantity sold. This calculation helps to identify the extent of the deviation from the planned contribution margin and assists in determining the causes of the variance. Option B is the correct answer as it matches this definition. Options A, C, and D do not accurately describe the calculation for the unit price or unit cost factor.

Question 20

In contribution margin analysis,the unit price or unit cost factor is computed as the difference between the actual unit price or unit cost and the planned unit price or unit cost,multiplied by the actual quantity sold.

Accepted Answer

This statement accurately describes the computation of the unit price or unit cost factor in contribution margin analysis.

Quiz 20: Variable Costing for Management Analysis

If variable selling and administrative expenses totaled $124,000 for the year (80,000 units at $1.55 each) and the planned variable selling and administrative expenses totaled $136,500 (78,000 units at $1.75 each) ,the effect of the quantity factor on the change in contribution margin is:

In contribution margin analysis,the effect of a difference in unit sales price or unit cost on the number of units sold is termed the unit price or unit cost factor.

If variable cost of goods sold totaled $80,000 for the year (16,000 units at $5.00 each) and the planned variable cost of goods sold totaled $86,250 (15,000 units at $5.75 each) ,the effect of the quantity factor on the change in contribution margin is:

If variable cost of goods sold totaled $90,000 for the year (18,000 units at $5.00 each) and the planned variable cost of goods sold totaled $86,400 (16,000 units at $5.40 each) ,the effect of the unit cost factor on the change in contribution margin is:

If variable selling and administrative expenses totaled $120,000 for the year (80,000 units at $1.50 each) and the planned variable selling and administrative expenses totaled $136,500 (78,000 units at $1.75 each) ,the effect of the unit cost factor on the change in contribution margin is:

In contribution margin analysis,the quantity factor is computed as the difference between actual quantity sold and the planned quantity sold,multiplied by the planned unit sales price or unit cost.

If sales totaled $200,000 for the current year (10,000 units at $20 each) and planned sales totaled $212,500 (12,500 units at $17 each) ,the effect of the unit price factor on the change in sales is a:

A change in the amount of sales can be due to either a change in the units sold or a change in price or both.

If variable cost of goods sold totaled $80,000 for the year (16,000 units at $5.00 each) and the planned variable cost of goods sold totaled $86,250 (15,000 units at $5.75 each) ,the effect of the unit cost factor on the change in contribution margin is:

In contribution margin analysis,the increase or decrease in unit sales price or unit cost on the number of units sold is referred to as the:

In contribution margin analysis,the effect of a difference in unit sales price or unit cost on the number of units sold is termed the quantity factor.

In the contribution margin analysis,the effect of a change in the number of units sold,assuming no change in unit sales price or unit cost,is referred to as the:

If sales totaled $800,000 for the year (80,000 units at $10.00 each) and the planned sales totaled $799,500 (78,000 units at $10.25 each) ,the effect of the quantity factor on the change in sales is:

Which of the following causes the difference between the planned and actual contribution margin?

If sales totaled $800,000 for the year (80,000 units at $10.00 each) and the planned sales totaled $799,500 (78,000 units at $10.25 each) ,the effect of the unit price factor on the change in sales is:

In contribution margin analysis,the quantity factor is computed as:

If variable cost of goods sold totaled $90,000 for the year (18,000 units at $5.00 each) and the planned variable cost of goods sold totaled $86,400 (16,000 units at $5.40 each) ,the effect of the quantity factor on the change in contribution margin is:

In contribution margin analysis,the unit price or unit cost factor is computed as the difference between actual quantity sold and the planned quantity sold,multiplied by the planned unit sales price or unit cost.

In contribution margin analysis,the unit price or unit cost factor is computed as:

In contribution margin analysis,the unit price or unit cost factor is computed as the difference between the actual unit price or unit cost and the planned unit price or unit cost,multiplied by the actual quantity sold.