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Unformatted text preview: entify each of the following proﬁt equation components on the graph that follows: a. The total cost line. b. The total revenue line. c. The total variable costs area. d. Variable cost per unit. e. The ﬁxed costs area. f. The break-even point. g. The proﬁt area (range of volumes leading to proﬁt). h. The loss area (range of volumes leading to loss). cor50782_ch01_001-072.indd 1 (L.O. 1) lan27114_ch03_080-109.indd 96 ✓ Related Resources See pages 000 to 000 of the Annotated Instructor’s Edition for general suggestions related to the chapters in Part One. 1 10/5/09 11:09:29 PM 10/22/09 10:34:02 PM REVISED PAGES Chapter 3 Fundamentals of Cost-Volume-Profit Analysis \$ PART 1 97 Orientation Preparing and Organizing Yourself for Success in College 0 Volume 3-20. Proﬁt Equation Components Identify the letter of each proﬁt equation component on the graph that follows. (L.O. 1) CHAPTERS \$ IN PART ONE 1 Making Yourself Successful in College Line d 2 Approaching College Reading and c Developing a College-Level Vocabulary 3 Approaching College Assignments: Reading Textbooks and Following Directions Area e g b Area f a Volume 3-21. Basic Decision Analysis Using CVP Anu’s Amusement Center has collected the following data for operations for the year: Total revenues . . . . . . . . . . . . . . . . . . Total ﬁxed costs. . . . . . . . . . . . . . . . . Total variable costs . . . . . . . . . . . . . . Total tickets sold . . . . . . . . . . . . . . . . cor50782_ch01_001-072.indd 1 lan27114_ch03_080-109.indd 97 \$800,000 \$218,750 \$450,000 50,000 ✓ Related Resources See pages 000 to 000 of the Annotated Instructor’s Edition for general suggestions related to the chapters (L.O. 1) in Part One. S 1 10/5/09 11:09:29 PM 10/22/09 10:34:02 PM REVISED PAGES Part II 98 Cost Analysis and Estimation 1 Required PA a. What is the average selling price for a ticket? R T b. What is the average variable cost per ticket? c. What is the average contribution margin per ticket? d. What is the break-even point? e. Anu has decided that unless the operation can earn at least \$43,750 in operating proﬁts, she will close it down. What number of tickets must be sold for Anu’s Amusements to make a \$43,750 operating proﬁt for the year on ticket sales? Orientation (L.O. 1) 3-22. Basic CVP Analysis The manager of Kima’s Food Mart estimates operating costs for the year will include \$900,000 in ﬁxed costs. Required Preparing and Organizing Yourself a. Find the break-even point in sales dollars with a contribution margin ratio of 40 percent. b. Find the break-even point in sales dollars with a contributionin College25 percent. for Success margin ratio of c. Find the sales dollars required to generate a proﬁt of \$200,000 for the year assuming a contribution margin ratio of 40 percent. (L.O. 1) 3-23. CVP Analysis—Ethical Issues Mark Ting desperately wants his proposed new product, DNA-diamond, to be accepted by top management. DNA-diamond is a piece of jewelry that contains the DNA of a boy or girl friend, spouse, or other loved one. Top management will not approve this product in view...
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This note was uploaded on 02/07/2014 for the course MIS 304 taught by Professor Mejias during the Spring '07 term at Arizona.

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