1. Explain how changes in activity affect CM and Net operating income

2. Interpret a CVP graph which portrays the revenue and cost characteristics of a company's products and operations. Explain how the lines on the graph and the break even point would change if (a) the selling price per unit decreased, (b) fixed cost increased during the entire range of activity portrayed on the graph , and (c) variable cost per unit increased

3. How to use CM ratio to compute changes in CM and Net operating income resulting from changes in sales volume.

4. Explain the effects on CM of changes in variable cost, fixed costs, selling price and volume

5. Define break even point and how it's computed

6. Determine the level of sales needed to achieve a desired target profit

7. Define Margin of Safety and explain its significance.

8. Define Degree of Operating Leverage at a particular level of sales and explain how it can be used to predict changes in Net operating income

9. Compute the break even point for a multi product company and explain the effects of shifts in the sales mix on CM and the break even point. What assumption is usually made concerning sales mix in CVP analysis. Explain how a shift in the sales mix could result in a higher break even point and a lower net income.