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Kimmel.SM.cp18.vpdf

# Accounting: Tools for Business Decision Making

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18-1 CHAPTER 18 Cost-Volume-Profit ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises A Problems B Problems * 1. Distinguish between variable and fixed costs. 1, 2, 3, 6, 8 1 1, 2, 3 1A 1B * 2. Explain the significance of the relevant range. 4, 5 2 * 3. Explain the concept of mixed costs. 6, 7, 8, 1, 3, 4, 5 1, 2, 3 1A 1B * 4. List the five components of cost-volume-profit analysis. 9 * 5. Indicate what contribution margin is and how it can be expressed. 10, 11, 12 6, 7 4, 5, 6, 9, 11 1A, 2A, 3A, 4A, 5A 1B, 2B, 3B, 4B, 5B * 6. Identify the three ways to determine the break-even point. 13, 14, 15 8, 9 4, 6, 7, 9, 10 1A, 2A, 3A, 4A, 5A 1B, 2B, 3B, 4B, 5B * 7. Give the formulas for determining sales required to earn target net income. 16 10, 12 7 2A, 4A, 5A 2B, 4B, 5B * 8. Define margin of safety, and give the formulas for computing it. 17 11 4, 6, 8, 9, 10, 11 2A, 3A, 4A, 5A 2B, 4B, 5B

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18-2 ASSIGNMENT CHARACTERISTICS TABLE Problem Number Description Difficulty Level Time Allotted (min.) 1A Determine variable and fixed costs, compute break-even point, prepare a CVP graph, and determine net income. Simple 20 30 2A Prepare a CVP income statement, compute break-even point, contribution margin ratio, margin of safety ratio, and sales for target net income. Moderate 30 40 3A Compute break-even point under alternative courses of action. Simple 20 30 4A Compute break-even point and margin of safety ratio, and prepare CVP income statement before and after changes in business environment. Moderate 20 30 5A Compute break-even point and margin of safety ratio, and prepare a CVP income statement before and after changes in business environment. Moderate 20 30 1B Determine variable and fixed costs, compute break-even point, prepare a CVP graph, and determine net income. Simple 20 30 2B Prepare a CVP income statement, compute break-even point, contribution margin ratio, margin of safety ratio, and sales for target net income. Moderate 30 40 3B Compute break-even point under alternative courses of action. Simple 20 30 4B Compute break-even point and margin of safety ratio, and prepare CVP income statement before and after changes in business environment. Moderate 20 30 5B Compute break-even point and margin of safety ratio, and prepare a CVP income statement before and after changes in business environment. Moderate 20 30
BLOOM’S TAXONOMY TABLE 18-3 Correlation Chart between Bloom’s Taxonomy, Study Objectives and End-of-Chapter Exercises and Problems Study Objective Knowledge Comprehension Application Analysis Synthesis Evaluation * 1. Distinguish between variable and fixed costs. Q18-1 Q18-2 Q18-3 Q18-6 BE18-1 E18-1 Q18-8 E18-2 E18-3 P18-1A P18-1B * 2. Explain the significance of the relevant range. Q18-4 Q18-5 BE18-2 * 3. Explain the concept of mixed costs. Q18-6 Q18-7 BE18-1 E18-1 Q18-8 BE18-4 BE18-5 BE18-3 E18-2 E18-3 P18-1A P18-1B * 4.

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