CVP analysis can be used to study the effect of:
changes in selling prices on a company's profitability.
changes in variable costs per unit on a company'sprofitability.
changes in total fixed costs on a company's profitability.
All of the answers are correct.
CVP analysis can be used to study the effect of:
changes in selling prices on a company's profitability. | ||
changes in variable costs per unit on a company'sprofitability. | ||
changes in total fixed costs on a company's profitability. | ||
All of the answers are correct. |
Related questions
At the end of the year, a company offered to buy 4,950 units of a product from X Company for a special price of $12.00 each instead of the company's regular price of $17.00 each. The following information relates to the 62,300 units of the product that X Company made and sold to its regular customers during the year:
| Per-Unit | Total | ||
| Cost of goods sold | $8.38 | $522,074 | |
| Period costs | 2.54 | 158,242 | |
| Total | $10.92 | $680,316 | |
Fixed cost of goods sold for the year were $114,009, and fixed period costs were $90,335. Variable period costs include selling commissions equal to 3% of revenue
Assume the following two changes for the special order: 1) variable cost of goods sold will increase by $0.73 per unit, and 2) there will be no selling commissions. What will be the effect of these two changes on the special order profit?
