CVP Analysis, Contribution Margin, Contribution Margin Ratio

_______________ tool that helps managers make important business decisions

Relies on the ___________________ of ________ components of information o If you know or can estimate four of these five components, you can compute the remaining _______________

Sales price per units _______________

Volume sold _______________

VE per unit

Fixed Expenses

Operating Income (profit or loss)

Assumptions Underlying CVP Analysis

Managers _________ be aware of these when using CVP:

Change in volume is the only factor that affects ___________

Managers can classify each cost as either ____________ or __________.

These costs are linear throughout relevant range

Revenues are _____________ throughout relevant range

Inventory levels will __________ change

The sales mix of products will _________ change

Combination of products that make up total sales