Assignment Cost Volume and Profit Formulas

Assignment Cost Volume and Profit Formulas - There are five...

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There are five basic components to the cost-volume-profit analysis which are: Volume or level of activity, unit selling price, variable cost per unit, total fixed cost, and sales mix. The first component is the volume or level activity which is a snapshot of the sales of products. This helps determine if products are moving from the shelves and onto consumers or if no one is buying that particular item. It also gives you a look at the current condition of the market and the company to see if people are spending money on consumer products. The second component is the unit selling price. The unit selling price is the current price of a product at that current or particular time. This includes the cost of producing the item plus any markup percentage, which would be the profit to the company. The third component is the variable cost per unit which is the costs that vary in total in direct and proportion with the changes in the volume or activity level of sales. This component is dependent upon sales increase
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