cost volume and profit - Assignment: Cost, Volume, and...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Assignment: Cost, Volume, and Profit Formulas Cost, Volume, and Profit Formulas Nikki Vergets Acc/220 12/18/10 Eric Weitner 1 1. Explain the components of Cost, Volume, and Profit analysis. Cost-volume-profit (CVP) analysis is used to determine how changes in costs and volume affect a company's operating income and net income. In performing this analysis, there are several assumptions made, including: - Sales price per unit is constant.- Variable costs per unit are constant.- Total fixed costs are constant.- Everything produced is sold.- Costs are only affected because activity changes.- If a company sells more than one product, they are sold in the same mix. 2. What does each of the components mean? The volume or level of activity is basically how many units are produced or sold. The unit selling prices are the cost that each unit produced is sold or expected to be sold for. The variable cost per unit basically means that the cost of each unit produced or sold may change, depending on the activity level. Differing from variable costs, fixed costs may change, depending on the activity level....
View Full Document

This note was uploaded on 10/14/2011 for the course ACC 230 acc 230 taught by Professor Connie during the Summer '11 term at University of Phoenix.

Page1 / 5

cost volume and profit - Assignment: Cost, Volume, and...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online