Cost Volume Profit Analysis

Cost Volume Profit Analysis can plan many different roles in the overall management decision making process. Consider the following problems related to cost accounting and in a Word document, provide at least a 2-paragraph response to each one. Be sure to proofread your work prior to submitting to the drop box.

Describe cost volume profit analysis and how management can use it in more than just financial analysis.

Explain the main differences between operating income and net income overall for a business.

Explain and provide the calculation for how to derive the following: contribution margin, contribution margin per unit, and contribution margin percentage.

Describe what sensitivity analysis is and how it could be used by management to determine the proper course to take for decisions that need to be made for the firm.

How might a company with multiple products derive its breakeven point? What are some of the challenges in determining this?

 

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