Your roommate asks for your help on the following questions about CVP analysis formulas.
(a) How can the mathematical equation for break-even sales show both sales units and sales dollars?
(b) How do the formulas differ for unit contribution margin and contribution margin ratio?
(c) How can contribution margin be used to determine break-even sales in units and in dollars?
Instructions
Write a memo to your roommate stating the relevant formulas and answering each question.
Want to see the full answer?
Check out a sample textbook solutionChapter 5 Solutions
Managerial Accounting: Tools for Business Decision Making
Additional Business Textbook Solutions
Horngren's Accounting (11th Edition)
Financial Accounting (11th Edition)
Principles of Accounting Volume 1
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Financial Accounting, Student Value Edition (5th Edition)
Financial Accounting, Student Value Edition (4th Edition)
- Use the assumptions below to create calculations to determine annual and monthly revenue projections for each of the categories. Be sure to make the revenue category on the pro-forma view (above) descriptive and use your assumptions as drivers for the values calculated. Make it easy to change the assumptions to determine the impact of a change (up or down) in volume, rates and discounts. Insert lines or columns as needed.  Camps and Schools require physicals before kids arrive. There are 150 camper physicals spread evenly in May and June. There are 500 school physicals, 25% in July, 65% in August, and 10% in September. The insurance companies in covering families in your community are split 50% BC/BS and 40% United Healthcare and no insurance (private pay). Your normal camper physical charge is $115. You give BC/BS an 18% discount and United Health care a 15% discount. The special promotion for campers without insurance (private pay) is $75.  Camper Physical $ 115 Payor -…arrow_forwardClick the Chart sheet tab. This chart is based on the problem data and the two income statements. Answer the following questions about the chart: a. What is the title for the X-axis? b. What is the title for the Y-axis? c. What does data range A represent? d. What does data range B represent? e. Why do the two data ranges cross? f. What would be a good title for this chart? When the assignment is complete, close the file without saving it again. Worksheet. The VARCOST2 worksheet is capable of calculating variable and absorption income when unit sales are equal to or less than production. An equally common situation (that this worksheet cannot handle) is when beginning inventory is present and sales volume exceeds production volume. Revise the worksheet Data Section to include: Also, change actual production to 70,000. Revise the Answer Section to accommodate this new data. Assume that Anderjak uses the weighted-average costing method for inventory. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as VARCOSTT. Check figure: Absorption income, 670,000. Chart. Using the VARCOST2 file, fix up the chart used in requirement 5 by adding appropriate titles and legends and formatting the X- and Y-axes. Enter your name somewhere on the chart. Save the file again as VARCOST2. Print the chart.arrow_forwardA marketing professor at Givens College is interested in the relationship between hours spent studying and total points earned in a course. Data collected on 156 students who took the course last semester are provided in the tile MktHrsPts. Develop a scatter chart for these data. What does the scatter chart indicate about the relationship between total points earned and hours spent studying? Develop an estimated regression equation showing how total points earned is related to hours spent studying. What is the estimated regression model? Test whether each of the regression parameters β0 and β1 is equal to zero at a 0.01 level of significance. What are the correct interpretations of the estimated regression parameters? Are these interpretations reasonable? How much of the variation in the sample values of total point earned does the model you estimated in part (b) explain? Mark Sweeney spent 95 hours studying. Use the regression model you estimated in part (b) to predict the total points Mark earned.arrow_forward
- 1. Suppose the following historic data is available that can be used to predict if someone would repay their loan. Owns Has Repays Loan Name House Job Drinker Sam 1 1 Tim 1 Ann 1 Jim Design and describe a linear classifier model by hand for the given loan dataset to predict if someone would repay a loan or not. What is the classification accuracy of your classifier? No program needed. Apply gradient descent on LMSE to update weights, show accuracy before and after the update. Pick an appropriate learning rate.arrow_forwardPart of your job is to review customer requests for credit. You have three new credit applications on your desk and part of your analysis requires that the current ratlos and quick ratlos be compared.arrow_forwardDiscuss how, as warehouse manager for Vinnies Vinyls, you view the different rate of allocated costs the warehouse is being charged compared to the West store. Describe the implications of this. What steps could you take to solve this discrepancy? What alternatives would you consider, assuming management is willing to consider making changes in the rate?arrow_forward
- When customers used their points accumulated from customer loyalty award programs to purchase goods: Â a revenue would be recognized an expense would be recognized liability would increase revenue would decreasearrow_forwardFind an expression for the marginal revenue function, simplify it, and record your result in the box below. Be sure to use the proper variable in your answer. (Use the preview button to check your syntax before submitting your answer.) Answer: MR(g)arrow_forwardThe total number of term life insurance contracts sold in Problem 13 is 199. The following pie chart shows the percentages of contracts sold by each salesperson. a. What are the problems with using a pie chart to display these data? b. What type of chart would be preferred for displaying the data in this pie chart? c. Use a different type of chart to display the percentage of contracts sold by each salesperson that conveys the data better than the pie chart. Format the chart and add data labels to improve the charts readability.arrow_forward
- How to create a model to determine the company’s profit and to see how sensitive the profit is to the response rate from the mailing?arrow_forwardOne of your long-term customers asks if you can change the terms to FOB Destination to help them save money. Do you change the terms, why or why not? What positive and negative implications could this have for your business, and your customer? What, if any, restrictions might you consider if you did change the terms?arrow_forwardGive typing answer with explanation and conclusion  1. Discuss your reaction for the following mental accounting scenarios  Question 3—Part A: Suppose that you've taken half a day off work to shop for a new, ride-on lawn mower. You have a big yard, and trimming it with your current, push-propelled mower simply takes too long. You have been eyeing the Model A300, which offers all the features you require at a cost of $2,000. As luck would have it, you won $500 the previous evening playing bingo at your local Rotary Club. When you arrive at the lawn mower shop, you notice that they also stock Model A305, which has some fancy, desirable new options. This premium model costs $2,250. Considering the previous night's winnings, will you indulge yourself by purchasing the A305?  a. yes. b. no.arrow_forward
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeEssentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage LearningExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,