Cost Behavior and Cost-Volume-Profit AnalysisWarren / Reeve / DuchacExercise 19-2 Exercise 19-4 Exercise 19-7 Exercise 19-8 Exercise 19-9 Exercise 19-11 Exercise 19-13 Exercise 19-21 Problem 19-1A Problem 19-2A Problem 19-2B Problem 19-6B |
CVP analysis attempts to answer the following questions:
(1) What sales volume is required to break even?
(2) What sales volume is necessary in order to earn a desired (target) profit?
(3) What profit can be expected on a given sales volume?
(4) How would changes in selling price, variable costs, fixed costs, and output affect profits?
(5) How would a change in the mix of products sold affect the break-even and target volume and profit potential?
The components of CVP analysis are:
Level or volume of activity
Unit selling prices
Variable cost per unit
Total fixed costs
Sales mix
