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Unformatted text preview: 6-1CHAPTER 6Cost-Volume-Profit Analysis: Additional IssuesASSIGNMENT CLASSIFICATION TABLEStudy ObjectivesQuestionsBriefExercisesExercisesAProblemsBProblems1.Describe the essential featuresof a cost-volume-profit incomestatement.1, 2, 3, 41, 2, 3, 4,5, 61A, 2A1B, 2B2.Apply basic CVP concepts.2, 4, 5, 61, 2, 3, 4,5, 61, 2, 3,4, 51A, 2A, 4A1B, 2B,4B3.Explain the term sales mix andits effects on break-even sales.7, 8, 97, 8, 9, 106, 7, 8,9, 104A4B4.Determine sales mix when acompany has limited resources.10, 1111, 1511, 12, 133A3B5.Understand how operatingleverage affects profitability.12, 13, 14,15, 1612, 13, 1414, 15, 165A5B*6.Explain the difference betweenabsorption costing and variablecosting.1716, 17, 1817, 18, 196A, 7A6B, 7B*7Discuss net income effectsunder absorption costingversus variable costing.19, 20, 21,2219186A, 7A6B, 7B*8Discuss the merits of absorptionversus variable costing formanagement decision making.187A7B*Note:All asteriskedQuestions, Exercises, and Problems relate to material contained in the appendixto the chapter.6-2ASSIGNMENT CHARACTERISTICS TABLEProblemNumberDescriptionDifficultyLevelTimeAllotted (min.)1ACompute break-even point under alternative courses ofaction.Moderate20302ACompute break-even point and margin of safety ratio, andprepare a CVP income statement before and after changesin business environment.Moderate20303ADetermine sales mix with limited resources.Simple10154ADetermine break-even sales under alternative salesstrategies and evaluate results.Moderate20305ACompute degree of operating leverage and evaluateimpact of operating leverage on financial results.Moderate2030*6APrepare income statements under absorption costing andvariable costing for a company with beginning inventory,and reconcile differences.Moderate2030*7APrepare absorption and variable costing income statementsand reconcile differences between absorption and variablecosting income statements when sales level and productionlevel change. Discuss relative usefulness of absorptioncosting versus variable costing.Moderate20301BCompute break-even point under alternative courses ofaction.Moderate20302BCompute break-even point and margin of safety ratio, andprepare a CVP income statement before and after changesin business environment.Moderate20303BDetermine sales mix with limited resources.Simple10154BDetermine break-even sales under alternative salesstrategies and evaluate results.Moderate20305BCompute degree of operating leverage and evaluateimpact of operating leverage on financial results.Moderate2030*6BPrepare income statements under absorption costing andvariable costing for a company with beginning inventory,and reconcile differences....
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- Fall '08
- Income Statement