A Ten-Question Sequence to Capture the Concepts of Cost-Volume-Profit Analysis
Abstract
Cost-volume-profit analysis is an important planning tool used in business to capture the behavior of costs so that the behavior patterns can then be used to determine the impact of various production and sales levels on the... [ view full abstract ]
Cost-volume-profit analysis is an important planning tool used in business to capture the behavior of costs so that the behavior patterns can then be used to determine the impact of various production and sales levels on the net income (or net loss) of the business. This paper first presents a discussion of cost behavior possibilities, followed by a ten-question sequence that captures the key determinants found in cost-volume-profit analysis that is a part of economics, finance, accounting and other business courses. These ten questions include determining units and sales dollars needed to break-even, units needed to earn a target net income of both a total amount and an amount per unit both without and then with a tax rate, finding unknowns when changes are made to the data (such as increasing variable costs, decreasing fixed costs, etc.) and a final problem that takes a broader look at cost behavior patterns and the corresponding positive or negative impact of the behavior patterns on the business.
Authors
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William Pollard
(Appalachian State University)
Topic Area
Topics: Accounting - click here when done
Session
AC1 » Accounting Potpourri (08:30 - Thursday, 5th October, Arcadian 3-4)
Paper
Ten-Question_Sequence_for_C-V-P_Analysis_-_May_2017.pdf
Presentation Files
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