Question
True/False a) Total variable costs change in direct proportion to changes in the volume of procution. b) During the current year, Albee Company incurred $7,000
True/False
a) Total variable costs change in direct proportion to changes in the volume of procution.
b) During the current year, Albee Company incurred $7,000 of fixed and $16,000 variable costs. If the number of units produced is halved next year, the company will incur $3,500 as fixed and $8,000 as variable costs.
c) Cost-volume-profit (CVP) analysis assumes that the selling price per unit does not change as volume changes.
d) The breakeven point is the point where the sales revenues are equal to the total variable costs plus the total fixed costs.
e) Fixed costs divided by the contribution margin per unit equals breakeven point in unit sales.
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