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Chapter 7 notes (1) - Protected View - Saved to this PC 1 Tillmoni agn Layout References Mailings Review View Help Search les from the Internet can contain viruses. Unless you need to edit it's safer to stay in Protected View Enable Editing 16. What should managers always be careful about when they are predicting profits at different volumes? 24. When wing this formula to find the breakeven point, what do we ALWAYS set operating income equal to? 25. What types of companies tend to use the CM ratio approach rather than the CM unit approach? 17. Why is CM often used, rather than sales revenue for calculating sales commissions? 26. Comparing formulas a If we want our answer in UNITS, divide the numerator by h. If we want our wer in SALES REVENUE, divide the boy Part III - How do managers find the breakeven point? (LO2) 18. The breakeven point is the level of at which operating income is $ In other words, at that point in sales, To be profitable, a company must sell the voheme to breakeven. If they sell less than the volume to breakeven, then they will have a Part IV. How do managers find the volume needed to earn a target profit? 27. If we want to know how many units must be sold or how much sales revenue must be penerated to earn a specified level of profit (before tax), what do we set operating income equal to in the formulas? 19. The income statement approach is based on the format of the income statement. Using this approach, sales and variable expenses are expressed on a per unit basis To find the breakeven point, we fill in all of the information we know and set operating income equal to Finally, we solve line and then lines. What does the 28. When graphing CVP relationships, we first graph the graph the and tersection of the sales revenue and total expense line equal? Any volume higher sale volume results in an) lower sales volume results in (o) 20. At breakeven, the company's fixed expenses equal its while say 21. The shortcut approach using the CMunit starts the same way as the income statement approach, but rearranges terms in order to end with a peneral-use formula expressed in terms of the member of its that need to be sold What is the formula? Part V. How do manager use CVP to plan for changing business conditions? (L.Os 3 and 29 What is sensitivity analysis 22. When using this formula to find the breakeven point, what do we ALWAYS set operating income equal to? 30. A decrease in sales price with no changes in costs, will result in a CMunit, which will cause the volume needed to break even (or achieve a target profit) to than it was before the price change. So na Beed to be sold to reach the same financial goals. The opposite is also true 23. A second shortcut approach using the CM ratio also begins the same way as the income statement approach, but rearranges terms in order to end with a general use formula expressed in terms of the sales sales in dollars) that needs to be generated What is the formula? 31. Managers can quickly forecast the expected increase or decline in operating income from changing sales price or volume by multiplying the new T by the expected 32. To determine the most profitable price point, managers need to consider the trade-off between and 33. An increase in variable cost, with no change in sales pnce, will result in a_ C unit, which will cause the volume needed to break even (or achieve a target profit) to than it was before the change in cost. So This is Layout References Malinys Ke Enable Editing from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View 16. What should managers always be careful about when they are predicting profits at different volumes? 17. Why is CM often used, rather than sales revenue, for calculating sales commissions? Part III- How do managers find the breakeven point? (LO2) 18. The breakeven point is the level of at which operating income is $_ In other words, at that point in sales, To be profitable, a company must sell the volume to breakeven. If they sell less than the volume to breakeven, then they will have a 19. The income statement approach is based on the format of the income statement. Using this approach, sales and variable expenses are expressed on a per unit basis. To find the breakeven point, we fill in all of the information we know and set operating income equal to . Finally, we solve for 20. At breakeven, the company's fixed expenses equal its 21. The shortcut approach using the CM/ unit starts the same way as the income statement approach, but rearranges terms in order to end with a general-use formula expressed in terms of the number of units that need to be sold. What is the formula? 22. When using this formula to find the breakeven point, what do we ALWAYS set operating income equal to? 23. A second shortcut approach using the CM ratio also begins the same way as the income statement approach, but rearranges terms in order to end with a general-use formula expressed in terms of the sales revenue (sales in dollars) that needs to be generated. What is the formula? 24. When using this formula to find the breakeven point, what do we ALWAYS set operating income equal to? 25. What types of companies tend to use the CM ratio approach rather than the CM/unit approach? 26. Comparing formulas: a. If we want our answer in UNITS, divide the numerator by . If we want our answer in SALES REVENUE, divide the numerator by Part IV - How do managers find the volume needed to earn a target profit? 27. If we want to know how many units must be sold or how much sales revenue must be generated to earn a specified level of profit (before tax), what do we set operating income equal to in the formulas? line and then lines. What does the 28. When graphing CVP relationships, we first graph the graph the and intersection of the sales revenue and total expense line equal? Any volume higher sale volume results in an) lower sales volume results in an) while any Part V- How do manager use CVP to plan for changing business conditions? (LOs 3 and 4) 29. What is sensitivity analysis? 30. A decrease in sales price, with no changes in costs, will result in a CMunit, which will cause the volume needed to break even (or achieve a target profit) to than it was before the price change. So units need to be sold to reach the same financial goals. The opposite is also true. by 31. Managers can quickly forecast the expected increase or decline in operating income from changing sales price or volume by multiplying the new the expected 32. To determine the most profitable price point, managers need to consider the trade off between and 3). An increase in variable cout, with no change in sales price will result CMunt which will cause the volume needed to break even (or achieve a target pront Chapter 7 notes (1) - Protected View - Saved to this PC 1 Tillmoni agn Layout References Mailings Review View Help Search les from the Internet can contain viruses. Unless you need to edit it's safer to stay in Protected View Enable Editing 16. What should managers always be careful about when they are predicting profits at different volumes? 24. When wing this formula to find the breakeven point, what do we ALWAYS set operating income equal to? 25. What types of companies tend to use the CM ratio approach rather than the CM unit approach? 17. Why is CM often used, rather than sales revenue for calculating sales commissions? 26. Comparing formulas a If we want our answer in UNITS, divide the numerator by h. If we want our wer in SALES REVENUE, divide the boy Part III - How do managers find the breakeven point? (LO2) 18. The breakeven point is the level of at which operating income is $ In other words, at that point in sales, To be profitable, a company must sell the voheme to breakeven. If they sell less than the volume to breakeven, then they will have a Part IV. How do managers find the volume needed to earn a target profit? 27. If we want to know how many units must be sold or how much sales revenue must be penerated to earn a specified level of profit (before tax), what do we set operating income equal to in the formulas? 19. The income statement approach is based on the format of the income statement. Using this approach, sales and variable expenses are expressed on a per unit basis To find the breakeven point, we fill in all of the information we know and set operating income equal to Finally, we solve line and then lines. What does the 28. When graphing CVP relationships, we first graph the graph the and tersection of the sales revenue and total expense line equal? Any volume higher sale volume results in an) lower sales volume results in (o) 20. At breakeven, the company's fixed expenses equal its while say 21. The shortcut approach using the CMunit starts the same way as the income statement approach, but rearranges terms in order to end with a peneral-use formula expressed in terms of the member of its that need to be sold What is the formula? Part V. How do manager use CVP to plan for changing business conditions? (L.Os 3 and 29 What is sensitivity analysis 22. When using this formula to find the breakeven point, what do we ALWAYS set operating income equal to? 30. A decrease in sales price with no changes in costs, will result in a CMunit, which will cause the volume needed to break even (or achieve a target profit) to than it was before the price change. So na Beed to be sold to reach the same financial goals. The opposite is also true 23. A second shortcut approach using the CM ratio also begins the same way as the income statement approach, but rearranges terms in order to end with a general use formula expressed in terms of the sales sales in dollars) that needs to be generated What is the formula? 31. Managers can quickly forecast the expected increase or decline in operating income from changing sales price or volume by multiplying the new T by the expected 32. To determine the most profitable price point, managers need to consider the trade-off between and 33. An increase in variable cost, with no change in sales pnce, will result in a_ C unit, which will cause the volume needed to break even (or achieve a target profit) to than it was before the change in cost. So This is Layout References Malinys Ke Enable Editing from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View 16. What should managers always be careful about when they are predicting profits at different volumes? 17. Why is CM often used, rather than sales revenue, for calculating sales commissions? Part III- How do managers find the breakeven point? (LO2) 18. The breakeven point is the level of at which operating income is $_ In other words, at that point in sales, To be profitable, a company must sell the volume to breakeven. If they sell less than the volume to breakeven, then they will have a 19. The income statement approach is based on the format of the income statement. Using this approach, sales and variable expenses are expressed on a per unit basis. To find the breakeven point, we fill in all of the information we know and set operating income equal to . Finally, we solve for 20. At breakeven, the company's fixed expenses equal its 21. The shortcut approach using the CM/ unit starts the same way as the income statement approach, but rearranges terms in order to end with a general-use formula expressed in terms of the number of units that need to be sold. What is the formula? 22. When using this formula to find the breakeven point, what do we ALWAYS set operating income equal to? 23. A second shortcut approach using the CM ratio also begins the same way as the income statement approach, but rearranges terms in order to end with a general-use formula expressed in terms of the sales revenue (sales in dollars) that needs to be generated. What is the formula? 24. When using this formula to find the breakeven point, what do we ALWAYS set operating income equal to? 25. What types of companies tend to use the CM ratio approach rather than the CM/unit approach? 26. Comparing formulas: a. If we want our answer in UNITS, divide the numerator by . If we want our answer in SALES REVENUE, divide the numerator by Part IV - How do managers find the volume needed to earn a target profit? 27. If we want to know how many units must be sold or how much sales revenue must be generated to earn a specified level of profit (before tax), what do we set operating income equal to in the formulas? line and then lines. What does the 28. When graphing CVP relationships, we first graph the graph the and intersection of the sales revenue and total expense line equal? Any volume higher sale volume results in an) lower sales volume results in an) while any Part V- How do manager use CVP to plan for changing business conditions? (LOs 3 and 4) 29. What is sensitivity analysis? 30. A decrease in sales price, with no changes in costs, will result in a CMunit, which will cause the volume needed to break even (or achieve a target profit) to than it was before the price change. So units need to be sold to reach the same financial goals. The opposite is also true. by 31. Managers can quickly forecast the expected increase or decline in operating income from changing sales price or volume by multiplying the new the expected 32. To determine the most profitable price point, managers need to consider the trade off between and 3). An increase in variable cout, with no change in sales price will result CMunt which will cause the volume needed to break even (or achieve a target pront