Textbook Notes (367,974)
Canada (161,538)
Accounting (533)
ACC 406 (130)
Chapter 4

Chapter 4

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Department
Accounting
Course
ACC 406
Professor
Vincent Cappelli
Semester
Winter

Description
ACC 406 Chapter 4CostVolumeProfit Analysis A Managerial Planning ToolBREAKEVEN POINT in UNITS and in SALES DOLLARSCostvolume profit CVP estimates how changes in costs sales volume and prife affect a companys profitBreakEven Profit is the point where total revnue equals total cost the point of zero profitcan addressof units that must be sold to break even impact of a given reduction in fixed costs on the break even point impact of an increase in price on profitUsing Operating Income in Costvolume Profit analysisOperating income revenuesexpensesSeperate expenses by fixed and variable rather than by function manufacturing expense selling expense etcContribution Margin difference between sales and variable expenseIt is the amount of sales revenue left over after all the var exp are covered an can be used for fixed expContribution Margin Income Statement Income Statement based on seperation of costs into fixed and variableBreakEven Points in UnitOperating Income Sales Price Xof units soldTotal Variable Expenses Var cost per unit xof units soldTotal fixed expensesBreakeven Units total fixed costpricevariable cost per unitBreakEven Point in Sales DollarsAny answer expressed in units sold can be easily converted to sales revenues multiply unit seling price by units soldVariable co
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