Cost Behavior, Contribution Margin, and CVP Fundamentals

Apuntes

[Diapositiva 1] Horngren’s Accounting Fourteenth Edition Chapter 4 Cost-Volume-Profit Analysis Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved [Diapositiva 2] Learning Objectives (1 of 2) 4.1 Determine how changes in volume affect costs 4.2 Calculate operating income using contribution margin, unit contribution margin, and contribution margin ratio 4.3 Use cost-volume-profit (C V P) analysis for profit planning [Diapositiva 3] Learning Objectives (2 of 2) 4.4 Use C V P analysis to perform sensitivity analysis 4.5 Use C V P analysis to calculate margin of safety, operating leverage, and multiproduct breakeven points [Diapositiva 4] Learning Objective 4.1 Determine how changes in volume affect costs [Diapositiva 5] How Do Costs Behave When There Is a Change in Volume? Some costs change as the volume of sales increases or decreases. Other costs are not affected by changes in volume. Different types of costs are: Variable costs Fixed costs Mixed costs [Diapositiva 6] Variable Costs (1 of 2) Variable costs remain constant per unit but change in total as volume changes. Number of Tablets Produced Variable Cost per Tablet Total Variable Cost 0 tablets $ 55 $ 0 25 ...