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ACCT2006 Management Accounting Question A.3 (10 Marks) Describe the assumptions underlying CVP analysis. a. Dr. Charles Hunter, MD, performs a certain outpatient procedure for SI

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ACCT2006 Management Accounting Question A.3 (10 Marks) Describe the assumptions underlying CVP analysis. a. Dr. Charles Hunter, MD, performs a certain outpatient procedure for SI 000. His fixed costs are $20 000 per month, while his variable costs are $500 per procedure. Dr. Hunter currently plans to perform 200 procedures this month b. i. What is the budgeted profit for the month assuming that Dr. Hunter plans to perform the procedure 200 times? i What is the breakeven point (in units and dollars) for the month assuming that Dr Hunter plans to perform the procedure 200 times? iii How many times Dr Hunter should perform the procedure to carn an after-tax net profit of S70 000, assuming the tax rate is 30%? iv. Calculate the break-even level in dollars, assuming the selling price increases by 20%, fixed costs decrease by 10%, and variable costs increase by S 100 per unit. (2+8-10 Marks)

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