3-1
CHAPTER 3
COST–VOLUME–PROFIT ANALYSIS
NOTATION USED IN CHAPTER 3 SOLUTIONS
SP:
Selling price
VCU:
Variable cost per unit
CMU:
Contribution margin per unit
FC:
Fixed costs
TOI:
Target operating income
3-1Define cost–volume–profit analysis.
3-2Describe the assumptions underlying CVP analysis.
3-4Define contribution margin, contribution margin per unit, and contribution margin percentage.

3-5Describe three methods that managers can use to express CVP relationships.