Goals Achievement: Chapter Eighteen
A cost which varies in direct proportion to a change in an activity base, but is fixed per unit, is known as a:
Fixed costs are assumed to be constant:
Costs like supervisory salary, office space, and so forth, which increase in chunks are called:
A statistical technique that relies on mathematical formulas to separate a cost between its fixed and variable components is called:
The method of separating costs between fixed and variable components which relies on only two data points for analysis is called the:
The high-low method and scattergraph method will achieve the same results.
The break-even point in units can be determined by dividing fixed costs by the:
On a break-even graph with dollars on the vertical axis and sales volume on the horizontal axis, fixed costs would appear as a straight line parallel to the:
The contribution margin equals the selling price per unit minus the fixed cost per unit.
The contribution margin can be defined as the amount that an additional unit of sales contributes towards covering fixed costs and generating income.
In computing the sales volume necessary to achieve a target income, target income is treated the same as a:
In considering the impact of operating changes on CVP analysis, any change to any component in the CVP model will require a complete revision of all elements included in the original CVP analysis.
For a multi-product firm, the break-even point computation begins with a computation of the:
With a multi-product firm the break-even units refer to the sum of:
A limiting assumption of cost-volume-profit analysis is that costs can be classified as fixed or variable.
Correct cost-volume-profit analysis depends on the assumption that inventory levels: