The contribution margin ratio increases when
a. fixed costs increase.
b. fixed costs decrease.
c. variable costs as a percentage of sales decrease.
d. variable costs as a percentage of sales increase.
Answer: c. variable costs as a percentage of sales decrease.
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Park Ridge Company is considering the replacement of a machine that is presently used in production. The following data are available:
Old Machine New Machine Original cost $200,000 $160,000 Useful life in years 10 5 Current age in years 5 0 Book value $100,000 - Disposal value now $32,000 - Disposal value in 5 years 0 0 Annual cash operating costs $20,000 $14,000 Adding all five years together, the total relevant costs to consider if the old machine is kept is ________. A) $32,000 B) $68,000 C) $80,000 D) $100,000
Selective listening refers to
A) a highly focused form of listening. B) letting one's mind wander until something personally relevant is said. C) a form of defensive listening. D) listening only long enough to form an opinion. E) a timesaving technique in which you ignore at least 25% of what is being said.