Study Guides (248,639)
Canada (121,648)
Commerce (398)
COMM 305 (52)
All (29)

CHAPTER 6 305.docx

13 Pages
49 Views

Department
Commerce
Course Code
COMM 305
Professor
All

This preview shows pages 1,2,3. Sign up to view the full 13 pages of the document.
Description
CHAPTER6CostVolumeProfit Analysis and Income StatementCostvolumeprofit CVP analysis is the study of the effects that changes in costs and volume have on a companys profits1 The behaviour of both costs and revenues is linear throughout the relevant range of the activity index2 All costs can be classified with reasonable accuracy as either variable or fixed3 Changes in activity are the only factors that affect costs4 Inventory levels remain constantall units that are produced are sold5 When more than one type of product is sold the sales mix will remain constant That is the percentage of total sales that each product represents will stay the same The sales mix complicates CVP analysis because different products will have different cost relationships In this chapter we assume first a single product is being sold Study objective 7 addresses sales mix issuesThe costvolumeproflt CVP income statement classifies costs as variable or fixed and calculates a contribution margin Contribution margin CM is the amount of revenue that remains after variable costs have been deducted It is often stated both as a total amount and on a perunit basisContribution MarginCONTRIBUTION MARGIN PER UNIT
More Less
Unlock Document

Only pages 1,2,3 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit