# ch22 - CHAPTER 22 Cost-Volume-Profit Relationships...

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22-1 CHAPTER 22 Cost-Volume-Profit Relationships ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises A Problems B Problems * 1. Distinguish between variable and fixed costs. 1, 2, 3, 6 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 3, 4 1, 2, 3 1A 1B * 4. List the five components of cost-volume-profit analysis. 9 4 * 5. Indicate what contribution margin is and how it can be expressed. 10, 11 5 5, 7, 8 1A, 2A, 3A, 5A 1B, 2B, 3B, 5B * 6. Identify the three ways to determine the break-even point. 12, 13, 14 6 5, 6, 7, 8, 9 1A, 2A, 3A, 4A, 5A 1B, 2B, 3B, 4B, 5B * 7. Give the formulas for determining sales required to earn target net income. 16 7 9, 10 2A, 5A 2B, 5B * 8. Define margin of safety, and give the formulas for computing it. 15 8 5, 6 2A, 4A, 5A 2B, 4B, 5B * 9. Describe the essential features of a cost-volume-profit income statement. 17 9 11 2A, 4A 2B, 4B *10. Explain the difference between absorption costing and variable costing. 18, 19 10 12, 13 6A 6B * Note: All asterisked Questions, Exercises, and Problems relate to material contained in the appendix * to the chapter.

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22-2 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 *6A Prepare income statements under absorption and variable costing. Moderate 30–40 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 *6B Prepare income statements under absorption and variable costing. Moderate 30–40
22-3 Correlation Chart between Bloom’s Taxonomy, Study Objectives and End-of-Chapter Exercises and Problems Study Objective Knowledge Comprehension Application Analysis Synthesis Evaluation * 1.

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