A CVP graph, as illustrated below, is a useful technique for showing relationships among an organizations costs, volume, and profits.

Required:
1.	Identify the numbered components in the CVP graph.

(1)	(Click to select)Volume of output.Profit area.Break-even point.Total expense line.Fixed expense area.Variable expense area.Revenue line.Loss area.Dollars of revenue and costs.
(2)	(Click to select)Break-even point.Dollars of revenue and costs.Variable expense area.Volume of output.Profit area.Total expense line.Loss area.Revenue line.Fixed expense area.
(3)	(Click to select)Variable expense area.Fixed expense area.Loss area.Revenue line.Volume of output.Profit area.Dollars of revenue and costs.Total expense line.Break-even point.
(4)	(Click to select)Profit area.Fixed expense area.Dollars of revenue and costs.Volume of output.Revenue line.Loss area.Break-even point.Variable expense area.Total expense line.
(5)	(Click to select)Total expense line.Dollars of revenue and costs.Break-even point.Variable expense area.Fixed expense area.Revenue line.Volume of output.Profit area.Loss area.
(6)	(Click to select)Variable expense area.Dollars of revenue and costs.Volume of output.Profit area.Total expense line.Fixed expense area.Revenue line.Break-even point.Loss area.
(7)	(Click to select)Revenue line.Loss area.Total expense line.Fixed expense area.Break-even point.Volume of output.Variable expense area.Dollars of revenue and costs.Profit area.
(8)	(Click to select)Dollars of revenue and costs.Total expense line.Variable expense area.Profit area.Break-even point.Fixed expense area.Loss area.Revenue line.Volume of output.
(9)	(Click to select)Revenue line.Break-even point.Fixed expense area.Variable expense area.Total expense line.Loss area.Profit area.Volume of output.Dollars of revenue and costs.

2.	State the effect of each of the following actions on line 3, line 9, and the break-even point.

a.	The unit selling price is decreased from $30 to $27.

Line 3	(Click to select)Shift downward.Shift downward and have a flatter slope.Shift downward and have a steeper slope.Shift upward and have a flatter slope.Have a flatter slope.Remain unchanged.Shift upward.Have a steeper slope.Shift upward and have a steeper slope.
Line 9	(Click to select)Shift downward and have a flatter slope.Shift upward and have a steeper slope.Have a steeper slope.Shift downward and have a steeper slope.Have a flatter slope.Shift upward and have a flatter slope.Shift upward.Shift downward.Remain unchanged.
Break-even point	(Click to select)Remain unchanged.Probably change, but the direction is uncertain.Decrease.Increase.

b.	The per unit variable costs are increased from $12 to $15.

Line 3	(Click to select)Shift upward and have a flatter slope.Have a flatter slope.Shift downward and have a flatter slope.Shift upward.Shift downward and have a steeper slope.Have a steeper slope.Shift downward.Shift upward and have a steeper slope.Remain unchanged.
Line 9	(Click to select)Shift downward and have a flatter slope.Shift upward and have a steeper slope.Shift upward.Have a steeper slope.Shift downward.Remain unchanged.Have a flatter slope.Shift upward and have a flatter slope.Shift downward and have a steeper slope.
Break-even point	(Click to select)Remain unchanged.Probably change, but the direction is uncertain.Decrease.Increase.

c.	The total fixed costs are reduced by $40,000.

Line 3	(Click to select)Shift downward.Have a steeper slope.Shift upward and have a steeper slope.Have a flatter slope.Shift upward.Remain unchanged.Shift downward and have a flatter slope.Shift upward and have a flatter slope.Shift downward and have a steeper slope.
Line 9	(Click to select)Shift downward.Have a steeper slope.Shift upward and have a steeper slope.Shift downward and have a flatter slope.Have a flatter slope.Remain unchanged.Shift upward and have a flatter slope.Shift upward.Shift downward and have a steeper slope.
Break-even point	(Click to select)Remain unchanged.Decrease.Probably change, but the direction is uncertain.Increase.

d.	Five thousand fewer units are sold during the period than were budgeted.

Line 3	(Click to select)Have a flatter slope.Shift downward and have a steeper slope.Shift upward and have a flatter slope.Have a steeper slope.Shift downward.Remain unchanged.Shift downward and have a flatter slope.Shift upward and have a steeper slope.Shift upward.
Line 9	(Click to select)Shift downward and have a flatter slope.Shift upward.Have a flatter slope.Have a steeper slope.Remain unchanged.Shift upward and have a flatter slope.Shift downward and have a steeper slope.Shift downward.Shift upward and have a steeper slope.
Break-even point	(Click to select)Remain unchanged.Probably change, but the direction is uncertain.Decrease.Increase.

e.	Due to purchasing a robot to perform a task that was previously done by workers, fixed costs are increased by $25,000 per period, and variable costs are reduced by $8 per unit.

Line 3	(Click to select)Shift downward.Shift upward and have a flatter slope.Shift downward and have a flatter slope.Shift downward and have a steeper slope.Remain unchanged.Shift upward and have a steeper slope.Shift upward.Have a steeper slope.Have a flatter slope.
Line 9	(Click to select)Shift upward and have a flatter slope.Shift downward and have a steeper slope.Remain unchanged.Shift upward and have a steeper slope.Shift downward and have a flatter slope.Have a steeper slope.Shift downward.Shift upward.Have a flatter slope.
Break-even point	(Click to select)Remain unchanged.Increase.Probably change, but the direction is uncertain.Decrease.

f.	As a result of a decrease in the cost of materials, both unit variable costs and the selling price are decreased by $3.

Line 3	(Click to select)Have a flatter slope.Shift downward and have a flatter slope.Shift upward and have a flatter slope.Have a steeper slope.Shift downward.Remain unchanged.Shift upward.Shift upward and have a steeper slope.Shift downward and have a steeper slope.
Line 9	(Click to select)Have a steeper slope.Shift upward and have a steeper slope.Shift downward and have a steeper slope.Shift downward and have a flatter slope.Have a flatter slope.Shift upward and have a flatter slope.Remain unchanged.Shift downward.Shift upward.
Break-even point	(Click to select)Probably change, but the direction is uncertain.Increase.Remain unchanged in terms of units; decrease in terms of total dollars of sales.Decrease.

g.	Advertising costs are increased by $50,000 per period, resulting in a 10% increase in the number of units sold.

Line 3	(Click to select)Shift upward and have a steeper slope.Shift downward and have a flatter slope.Shift upward.Shift downward and have a steeper slope.Shift downward.Have a flatter slope.Have a steeper slope.Shift upward and have a flatter slope.Remain unchanged.
Line 9	(Click to select)Shift upward and have a steeper slope.Have a flatter slope.Shift upward and have a flatter slope.Shift upward.Shift downward and have a flatter slope.Remain unchanged.Shift downward.Have a steeper slope.Shift downward and have a steeper slope.
Break-even point	(Click to select)Probably change, but the direction is uncertain.Remain unchanged.Increase.Decrease.

h.	Due to paying salespersons a commission rather than a flat salary, fixed costs are reduced by $21,000 per period, and unit variable costs are increased by $6.

Line 3	(Click to select)Shift upward.Shift upward and have a flatter slope.Shift downward.Shift downward and have a steeper slope.Shift downward and have a flatter slope.Shift upward and have a steeper slope.Remain unchanged.Have a flatter slope.Have a steeper slope.
Line 9	(Click to select)Shift upward and have a flatter slope.Remain unchanged.Shift upward and have a steeper slope.Have a steeper slope.Shift downward and have a steeper slope.Shift upward.Have a flatter slope.Shift downward and have a flatter slope.Shift downward.
Break-even point	(Click to select)Probably change, but the direction is uncertain.Decrease.Remain unchanged.Increase.