You will discuss how cost behavior helps management plan operations and decide between alternative courses of action. You will also see how important variable costs and fixed costs are in determining the total costs under the high-low method, to calculate the breakeven point, and to complete the cost-volume-profit analysis.

Go to the P22-4A problem (pp. 2239) in your text. See the Do it example for information on break even analysis (also found in the Digital Book under Course Resources).

Compute the breakeven point for fiscal year 2020.

Compute the breakeven point in dollars under each of the alternative courses of action.

What course of action do you recommend and why?