ACC 220 Week 6 CheckPoint Cost, Volume, and Profit Questions

# ACC 220 Week 6 CheckPoint Cost, Volume, and Profit...

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ACC 220 Week 6 CheckPoint Cost, Volume, and Profit Questions Cost-Volume-Profit (CVP) Analysis deals with how profits and costs change with a change in  volume. More specifically, it looks at the effects on profits of changes in such factors as variable  costs, fixed costs, selling prices, volume, and mix of products sold. For the purpose of Cost- Volume-Profit   (CVP)   Analysis,   mixed   cost   must   be   classified   into   its   fixed   and   variable  component.   High-Low   method   is   on   of   the   procedure   to   classify   mixed   cost.   The   basic  components of Cost-Volume-Profit (CVP) analysis which are related to unit data are unit selling  price and variable cost per unit. Some components that are not per-unit amounts-based are
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Unformatted text preview: volume of production and total fixed costs. In constructing Cost-Volume-Profit (CVP) graph, (a) the breakeven point involves the plotting of three lines over the full range of activity: The total revenue line, the total fixed cost line, and the total cost line. The breakeven point is determined at the intersection of the total revenue and total cost lines. And (b) the breakeven point in units is obtained by drawing a vertical line from the breakeven point to the horizontal axis. The breakeven point in sales dollars is obtained by drawing a horizontal line from the breakeven point to the vertical axis....
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