Discuss the basic assumptions of CVP analysis and how we can use CVP analysis as mangers in making decisions.
2Define each cost and give examples of each.
1. Discretionary fixed costs
2. Committed fixed costs
3. Mixed Costs
4. Relevant Range
3.What are some ways to separate mixed costs into their variable and fixed amounts? Which method is the most accurate? Why?
4.Discuss the difference between variable costing and full costing. Why would income computed under full costing exceed income computed under variable costing if production exceeds sales?
1. What is variable costing? What is it used for?
2. Variable costing does not use GAAP so what information goes on a variable costing income statement? How would managers use this statement to make decision?
3. What information goes on an absorption income statement?
4. So what is different between the absorption and variable income statements?
Give examples when discussing these topics.
6.How does volume impact the definition of variable and fixed costs? What happens to fixed costs per unit when volume goes down?