(See related pages)
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Explain how changes in activity affect contribution margin and net operating income. |
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Prepare and interpret a cost-volume-profit (CVP) graph. |
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Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume. |
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Show the effects on contribution margin of changes in variable costs, fixed costs, selling price, and volume. |
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Compute the break-even point in unit sales and sales dollars. |
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Determine the level of sales needed to achieve a desired target profit. |
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Compute the margin of safety and explain its significance. |
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Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income. |
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Compute the break-even point for a multiproduct company and explain the effects of shifts in the sales mix on contribution margin and the break-even point. |