Please answer the following multiple choices questions with explaination: 1 . Wh
ID: 2446730 • Letter: P
Question
Please answer the following multiple choices questions with explaination:
1 . Why do companies use the ''contribution margin'' income statement format? Select one: a. To comply with Generally Accepted Accounting Principles (GAAP) b. For external reporting purposes c. To present Cost of Goods Sold to external users d. To predict how costs will behave with changes in activity e. None of the answer choices is correct 2. Which of the following statements is TRUE regarding Fixed and Variable Costs? Select one: a. Both costs are constant when considered on a per-unit basis b. Fixed costs are constant in total, & variable costs are constant per unit c. Both costs are constant when considered on a total basis d. Variable costs are constant in total, & fixed costs are constant per unit 3. The ''Margin of Safety'' is best described as: Select one: a. The amount of sales higher than the company?s ''relevant range'' b. The highest level of sales the company can possibly attain c. The difference between actual sales and the Break-Even Point d. The amount of sales closest to the Break-Even Point 4. The ''High-Low Method'' is used to: Select one: a. Analyze variable costs b. Analyze mixed costs c. Analyze fixed costs d. Analyze results outside of the ''relevant range''Explanation / Answer
1.
Answer is option (b) For external reporting purposes.
2.
Answer is option (b) Fixed costs are constant in total & variables costs are constant per unit.
3.
Answer is option (c) The difference between actual sales and the break even point.
4.
Answer is option (a) Analyze variable costs.