Which of the Following Statements Is Correct as It Relates

question 93

Multiple Choice

Which of the following statements is correct as it relates to a company that sells multiple products?

• A) CVP analysis cannot be used.
• B) Contribution margin is based on sales mix.
• C) CVP analysis is much easier to use.
• D) The break-even point remains the same even if sales mix changes.

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Definitions:

Discounted Note

A promissory note sold for less than its face value, which will be worth its full value upon maturity; used as a form of short-term financing.

Interest Expense

This is the cost incurred by an entity for borrowed funds, reflected as an expense on the income statement.

Adjusting Entry

A record entered at the conclusion of an accounting cycle to assign revenues and expenses to the appropriate period.

Discounted Note

A promissory note, or loan agreement, where the interest is deducted from the principal amount at the time the loan is issued.