The reason we classify costs by behavior is to facilitate -CVP- analysis and decision making. A concept used in this type of analysis is ----------, which helps us compute breakeven sales and target profit.

Budgeting

contribution margin

direct labor

direct materials

The reason why costs are classified according to purpose is to help with cost control and performance measures. One category is ----------related to making inventory goods.

manufacturing costs

manufacturing overhead

mixed costs

net present value

Manufacturing costs can further be broken up into ----------, the cost of raw materials.

direct labor

direct materials

manufacturing costs

manufacturing overhead

Overhead is allocated into ----------

Standards

variable costs

variance

work in process

Grand Company is considering an investment of $45,000. Data related to the investment are as follows:

Year

Cash Flow

1

$15,000

2

18,000

3

22,500

4

30,000

5

15,000

Cost of capital is 18 percent. What is the net present value of the investment, assuming no taxes are paid?

$10,500

$16,366

$61,366