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111 11:07 PM Back PS_Chap004.pdf PROBLEM 4-24 Interpretive Questions on the CVP Graph [L02, LO6) A CVP graph such as the one shown below is
111 11:07 PM Back PS_Chap004.pdf PROBLEM 4-24 Interpretive Questions on the CVP Graph [L02, LO6) A CVP graph such as the one shown below is a useful technique for showing relationships among an orga- nization's costs, volume, and profits. Required I. Identify the numbered components in the CVP graph. 2. State the effect of each of the following actions on line 3, line 9, and the break-even point. For line 3 and line 9, state whether the action will cause the line to: Remain unchanged. Shift upward. Shift downward. Have a steeper slope (i.e, rotate upward). Have a flatter slope (i.e., rotate downward). Shift upward and have a steeper slope. Shift upward and have a flatter slope. Shift downward and have a steeper slope. Shift downward and have a flatter slope. In the case of the break-even point, state whether the action will cause the break-even point to: Remain unchanged Increase Probably change, but the direction is uncertain Treat each case independently x. Example. Fixed costs are reduced by $5,000 per period. Line 3: Shift downward. Line 9: Remain unchanged. Break-even point: Decrease Answer (see choices above
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