question 19 cost - volume profit analysis is useful for 1-assigning costs to products 2-eliminating uncertainty...
question 19
cost - volume profit analysis is useful for
1-assigning costs to products
2-eliminating uncertainty about external factors, such as interest rate
3 helping mangers to answer what if question
4 implementing a differentiation strategy
5- for long range planning
Homework Answers
(1) Assigning costs to products.
CVP is a method of cost accounting and this analysis makes relationship between cost, sales volume and profitability. It decides how changes in cost and volume of sales affect the profitability of the company.
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question 19
cost - volume profit analysis is useful for
1-assigning costs to products
2-eliminating uncertainty...
Which one of the following is not an assumption of cost-volume-profit analysis? The behavior of costs...
Which one of the following is not an assumption of cost-volume-profit analysis? The behavior of costs is linear throughout the relevant range. All costs can be classified as either variable or fixed. Changes in activity and sales mix are the only factors that affect costs. O All units produced are sold.
________ is an underlying assumption of cost-volume-profit analysis. A : All costs can be classified as...
________ is an underlying assumption of cost-volume-profit analysis. A : All costs can be classified as either variable or fixed with reasonable accuracy B : Changes in activity and other factors affect costs C : The behavior of both costs and revenues is curvilinear throughout the entire range of the activity index D : All units produced are either sold or in ending inventory
Cost-volume-profit (CVP) analysis is a powerful tool for planning and decision making. Thus, CVP analysis emphasized...
Cost-volume-profit (CVP) analysis is a powerful tool for planning and decision making. Thus, CVP analysis emphasized the interrelationships of costs, quantity sold, and price. This analysis is defined as assessment of total revenues, total costs and operating income in response to changes in the volume of sales, the selling price, variable cost or fixed costs of production. The CVP analysis can be a valuable tool in identifying the extent and magnitude of the economic trouble a company is facing and...
Chapter 4 Cost-Volume-Profit Analysis: A Managerial Planning Tool 4-4 In the cost-volume-profit grap a. the break-even...
Chapter 4 Cost-Volume-Profit Analysis: A Managerial Planning Tool 4-4 In the cost-volume-profit grap a. the break-even point is found where the total revenue curve crosses the x-axis. b. the area of profit is to the lett of the break-even point. c. the area of loss cannot be determined. d. both the total revenue curve and the total cost curve appear. e. neither the total revenue curve nor the total cost curve appear. n important assumption of cost-volume-profit analysis is that...
EX 19-17 Cost-volume-profit chart For the coming year, Weill Inc. anticipates fixed costs of $240,000, a...
EX 19-17 Cost-volume-profit chart For the coming year, Weill Inc. anticipates fixed costs of $240,000, a unit variable cost of $80, and a unit selling price of $120. The maximum sales within the relevant range are $1,200,000. a. Construct a cost-volume-profit chart. b. Estimate the break-even sales (dollars) by using the cost-volume-profit chart constructed in part (a). c. What is the main advantage of presenting the cost-volume-profit analysis in graphic form rather than equation form?
Chapter 21 Cost- Volume Profit Analysis 2. How does assuming that operating activity occurs within a...
Chapter 21 Cost- Volume Profit Analysis 2. How does assuming that operating activity occurs within a relevant range affect cost-volume profit analysis? 3. How is a scatter diagram used to identify and measure the behavior of a company's costs? 4. In cost-volume profit analysis, what is the estimated profit at the break-even point?
PROBLEM 4: Cost Volume Profit In the Face of Uncertainty A niche server manufacturer (the Company)...
PROBLEM 4: Cost Volume Profit In the Face of Uncertainty A niche server manufacturer (the Company) is exploring changing its manufacturing practice. Its current product, DX38 is priced at $100. If demand picks up, it can raiso prices, but competition may cap its ability of how much. Sales are expected to be 150,000 units for next year. Currently, the Company leases plant from IIP using some of their equipment. The Company manufactures about 70% of the parts of this circuit...
The cost volume profit analysis, commonly referred to as CVP, is a planning process that management...
The cost volume profit analysis, commonly referred to as CVP, is a planning process that management uses to predict the future volume of activity, costs incurred, sales made, and profits received. In other words, it’s a mathematical equation that computes how changes in costs and sales will affect income in future periods (Peavler, 2019). CVP analysis provides managers with the advantage of being able to answer specific questions needed in business analysis. Such as, what is the company's breakeven point?...
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio,...
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio, a manager should decrease fixed cost. The contribution margin ratio represents the percentage of sales revenue available to contribute towards covering variable and fixed costs. At the breakeven point, total sales revenue equals total costs. If a company expands operations outside of its relevant range, variable cost per unit could change, but total fixed costs will always stay constant.
QUESTION 20 A basic assumption of the cost-volume-profit model is that: Cost drivers can be organized...
QUESTION 20 A basic assumption of the cost-volume-profit model is that: Cost drivers can be organized into unit-level, batch-level, product-level and facility level factors Higher volumes of product require lower prices The mix of products changes over time All costs can be accurately classified as either fixed or variable
Which one of the following is not an assumption of cost-volume-profit analysis? The behavior of costs is linear throughout the relevant range. All costs can be classified as either variable or fixed. Changes in activity and sales mix are the only factors that affect costs. O All units produced are sold.
Chapter 4 Cost-Volume-Profit Analysis: A Managerial Planning Tool 4-4 In the cost-volume-profit grap a. the break-even point is found where the total revenue curve crosses the x-axis. b. the area of profit is to the lett of the break-even point. c. the area of loss cannot be determined. d. both the total revenue curve and the total cost curve appear. e. neither the total revenue curve nor the total cost curve appear. n important assumption of cost-volume-profit analysis is that...
EX 19-17 Cost-volume-profit chart For the coming year, Weill Inc. anticipates fixed costs of $240,000, a unit variable cost of $80, and a unit selling price of $120. The maximum sales within the relevant range are $1,200,000. a. Construct a cost-volume-profit chart. b. Estimate the break-even sales (dollars) by using the cost-volume-profit chart constructed in part (a). c. What is the main advantage of presenting the cost-volume-profit analysis in graphic form rather than equation form?
Chapter 21 Cost- Volume Profit Analysis 2. How does assuming that operating activity occurs within a relevant range affect cost-volume profit analysis? 3. How is a scatter diagram used to identify and measure the behavior of a company's costs? 4. In cost-volume profit analysis, what is the estimated profit at the break-even point?
PROBLEM 4: Cost Volume Profit In the Face of Uncertainty A niche server manufacturer (the Company) is exploring changing its manufacturing practice. Its current product, DX38 is priced at $100. If demand picks up, it can raiso prices, but competition may cap its ability of how much. Sales are expected to be 150,000 units for next year. Currently, the Company leases plant from IIP using some of their equipment. The Company manufactures about 70% of the parts of this circuit...
QUESTION 20 A basic assumption of the cost-volume-profit model is that: Cost drivers can be organized into unit-level, batch-level, product-level and facility level factors Higher volumes of product require lower prices The mix of products changes over time All costs can be accurately classified as either fixed or variable
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