Module Two – Chapter 6 Homework

Module Two – Chapter 6 Homework -...

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Module Two – Chapter 6 Homework Q: 2-4,8 2. An incremental analysis is where the business only considers items that will change if a new program is implemented: items of revenue, cost, volume, etc. 3. The company with the fixed costs would see the most gain in profit because variable costs go up with increased activity. 4. Operating leverage displays the sensitivity of a company’s financials. This refers directly to how net operating income sensitivity responds to a
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Unformatted text preview: percentage change in dollar. 8. Sales mix refers to the relative proportion of products sold for a company that produces the greatest profit. CVP (break-even point) is more complex because there are more factors involved that the costs of just one product. Multiple factors include: different cost, selling prices and contribution margins. P 19-21, 24, 25, 27-29...
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