During the current year, XYZ Company increased its variable SG&A expenses while keeping fixed SG&A expenses the same. As a result, XYZ’s:Contribution margin and gross margin will be lower.Contribution margin will be higher, while its gross margin will remain the same.Operating income will be the same under both the financial accounting income statement and contribution income statement.Inventory amounts booked under the financial accounting income statement will be lower than under the contribution income statement.Under the contribution income statement, a company’s contribution margin will be:Higher if fixed SG& A costs decrease.Higher if variable SG& A costs increase.Lower if fixed manufacturing overhead costs decrease.Lower if variable manufacturing overhead costs increase.

Name: During the current year, XYZ Company increased its variable SG&A expen
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Description: During the current year, XYZ Company increased its variable SG&A expenses while keeping fixed SG&A expenses the same. As a result, XYZ’s:Contribution margin and gross margin will be lower.Contribution margin will be higher, while its gross margin wil

Cost-Volume-Profit Analysis (CVP Analysis): CVP Analysis is a tool of cost accounting that measures…

Answered: During the current year, XYZ Company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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During the current year, XYZ Company increased its variable SG&A expenses while keeping fixed SG&A expenses the same. As a result, XYZ’s:

Contribution margin and gross margin will be lower.
Contribution margin will be higher, while its gross margin will remain the same.
Operating income will be the same under both the financial accounting income statement and contribution income statement.
Inventory amounts booked under the financial accounting income statement will be lower than under the contribution income statement.

Under the contribution income statement, a company’s contribution margin will be:

Higher if fixed SG& A costs decrease.
Higher if variable SG& A costs increase.
Lower if fixed manufacturing overhead costs decrease.
Lower if variable manufacturing overhead costs increase.

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