Copy of Quick CVP Lecture

Copy of Quick CVP Lecture - Cost/Volume/Profit Behavior and...

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Tom Wonnell 07/24/2008 Cost/Volume/Profit Behavior and Modeling A Short Lecture and Model Worksheet Demonstration
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Why Study Cost Behavior? Why Study Cost Behavior? Hilton/Maher/Selto/4E Estimating cost is a critical part of business management; it helps us: 1. Establish Business Plans 2. Manage Cost 3. Make Decisions Cost Behavior: Existing relationship between cost and activity Once we understand cost behavior we can use this understanding to estimate future cost
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Horngren/14E Variable and Fixed Cost Behavior Variable and Fixed Cost Behavior A A variable cost variable cost changes in direct changes in direct proportion to changes proportion to changes in the cost-driver level. in the cost-driver level. A A fixed cost fixed cost is is not immediately not immediately affected by changes affected by changes in the cost-driver. in the cost-driver.
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12-4 The break-even point is the point in the volume of activity at which the organization’s revenues and expenses are equal. Sales
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This note was uploaded on 11/16/2010 for the course ECN 5050 taught by Professor Yamashita during the Spring '10 term at Nova Southeastern University.

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Copy of Quick CVP Lecture - Cost/Volume/Profit Behavior and...

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