CVP - Chapter 6 on CVP PDF

Preview

Summary

Chapter 6 on CVP...

Description

1. CVP Analysis: a. Draw the CVP graph on the board for exercise 7-25 in your textbook. Discuss the different components of the graph. Complete the rest of the exercise. (example on page 274) b. Draw a profit-volume graph on the board for exercise 7-26. Discuss the different components of the graph. How does this differ from the CVP graph? Complete the rest of the exercise. (example on page 275) c. Discuss how to calculate target profit using the profit equation (example on page 276). d. Practice textbook problems: 7-34, 7-36 2. Safety Margin: a. Concept: P.277 Practice Problem 7-45 3. Sales Mix (Multiple Products): a. Concept: What is it? When do we use it? b. Page 282-284

4. Traditional vs. Contribution Income Statement: a. P.285 How does these two differ from each other? Know the format and order. b. Problem 7-28

5. Relevant Costs and Benefits a. Difference between qualitative and quantitative information in terms of accounting?

b. Discuss what kind of information is relevant to a decision? i. Bearing on the future ii. Different under competing alternatives c. How does each of the following matter to a decision problem? i. Sunk costs ii. Opportunity costs b. Difference between an avoidable expense and an unavoidable expense c. Problems on P.614-615 6. Accept or Reject a Special Offer a. problems 14-50, 14-51, 14-52 7. Outsourcing (Make or Buy) Decision 1. problems 14-35, 14-47, 14-48, 14-53 8. Add or Drop Decision 9. Keep or Replace Machinery a. define depreciation, book value, net loss on disposal of fixed assets b. specify which costs are relevant? c. Problem 14-34...