ch06 - 2008 For Instructor Use Only 6-1 CHAPTER 6...

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Unformatted text preview: 2008 For Instructor Use Only 6-1 CHAPTER 6 Cost-Volume-Profit Analysis: Additional Issues ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises A Problems B Problems 1. Describe the essential features of a cost-volume-profit income statement. 1, 2, 3, 4 1, 2, 3, 4, 5, 6 1A, 2A 1B, 2B 2. Apply basic CVP concepts. 2, 4, 5, 6 1, 2, 3, 4, 5, 6 1, 2, 3, 4, 5 1A, 2A, 4A 1B, 2B, 4B 3. Explain the term sales mix and its effects on break-even sales. 7, 8, 9 7, 8, 9, 10 6, 7, 8, 9, 10 4A 4B 4. Determine sales mix when a company has limited resources. 10, 11 11, 15 11, 12, 13 3A 3B 5. Understand how operating leverage affects profitability. 12, 13, 14, 15, 16 12, 13, 14 14, 15, 16 5A 5B *6. Explain the difference between absorption costing and variable costing. 17 16, 17, 18 17, 18, 19 6A, 7A 6B, 7B *7 Discuss net income effects under absorption costing versus variable costing. 19, 20, 21, 22 19 18 6A, 7A 6B, 7B *8 Discuss the merits of absorption versus variable costing for management decision making. 18 7A 7B 2008 For Instructor Use Only 6-2 ASSIGNMENT CHARACTERISTICS TABLE Problem Number Description Difficulty Level Time Allotted (min.) 1A Compute break-even point under alternative courses of action. Moderate 2030 2A Compute break-even point and margin of safety ratio, and prepare a CVP income statement before and after changes in business environment. Moderate 2030 3A Determine sales mix with limited resources. Simple 1015 4A Determine break-even sales under alternative sales strategies and evaluate results. Moderate 2030 5A Compute degree of operating leverage and evaluate impact of operating leverage on financial results. Moderate 2030 *6A Prepare income statements under absorption costing and variable costing for a company with beginning inventory, and reconcile differences. Moderate 2030 *7A Prepare absorption and variable costing income statements and reconcile differences between absorption and variable costing income statements when sales level and production level change. Discuss relative usefulness of absorption costing versus variable costing. Moderate 2030 1B Compute break-even point under alternative courses of action. Moderate 2030 2B Compute break-even point and margin of safety ratio, and prepare a CVP income statement before and after changes in business environment. Moderate 2030 3B Determine sales mix with limited resources. Simple 1015 4B Determine break-even sales under alternative sales strategies and evaluate results. Moderate 2030 5B Compute degree of operating leverage and evaluate impact of operating leverage on financial results. Moderate 2030 *6B Prepare income statements under absorption costing and variable costing for a company with beginning inventory, and reconcile differences....
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ch06 - 2008 For Instructor Use Only 6-1 CHAPTER 6...

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