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End of Chapter: Cost-Volume-Profit Analysis 4. Drop in sales a company can absorb without incurring an operating loss. 5. Combination of products that make up
End of Chapter: Cost-Volume-Profit Analysis 4. Drop in sales a company can absorb without incurring an operating loss. 5. Combination of products that make up total sales. 6. Net sales revenue minus variable costs. 7. Describes how a cost changes as volume changes. 8. Costs that change in total in direct proportion to changes in volume. 9. The band of volume where total fixed costs and variable cost per unit remain constant. E-M:4 28 Determining cost behavior (Learning Objective 1) Identify each cost below as variable (V), fixed (F), or mixed (M), relative to units sold. Explain your reason. Units Sold a. Total phone cost b. Materials cost per unit c. Manager's salary d. Depreciation cost per unit 25 $ 150 35 3,000 60 d. Margin of safety e. Relevant range f. Sales mix g. Fixed costs h. Variable costs i. Sensitivity analysis. 50 $ 200 35 3,000 30 75 $ 250 35 3,000 20 100 $ 300 35 3,000 15 UB
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