1. Distinguish between (a) a variable cost, (b) a fixed cost, and (c) a mixed cost.
2. What effect does an increase in volume have on
   1. Unit fixed costs?
   2. Unit variable costs?
   3. Total fixed costs?
   4. Total variable costs?
3. What factors affect a C-V-P analysis? What assumptions are used to perform a C-V-P analysis in this text?
4. Define the term: cost behavior.
5. Discuss the key purpose a company would use C-V-P Analysis.
6. explain the concept of Contribution Margin. What insight does it offer managers?
7. Consider this statement: The breakeven point for a product is reached. Once additional product is sold. What is the net operating income as a result of that additional sale?
8. What is meant by a product's contribution margin ratio? How is this ratio useful in planning business operations?
9. Explain the meaning of contribution margin ratio and variable expense ratio. How are they similar? Show the equation for each.
10. Consider the formula method to calculate the breakeven point. What is the difference between the formulas for breakeven unit sales and break even in sales dollars?
11. Explain the purpose of target profit analysis. What is the difference between target profit in units and target profit in dollar sales?
12. Compare the formulas for break even and target profit analysis. What is the difference between the two formulas? Show comparisons for both
13. Define the margin of safety. What information does it offer managers?
14. Often the most direct route to a business decision is an incremental analysis. What is meant by an incremental analysis?
15. In all respects, Company A and Company B are identical except that Company A's costs are mostly variable, whereas Company B's costs are mostly fixed. When sales increase, which company will tend to realize the greatest increase in profits? Explain.