EBK COST ACCOUNTING
EBK COST ACCOUNTING
15th Edition
ISBN: 9780133812763
Author: Rajan
Publisher: VST
Question
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Chapter 3, Problem 3.23E

1.

To determine

Cost-Volume-Profit Analysis (CVP Analysis):

CVP Analysis is a tool of cost accounting that measures the effect of variation on operating profit and net income due to the variation in proportion of sales and product costs.

Contribution Margin:

Contribution margin is the excess of selling price over the variable costs of a product. It is a tool to evaluate the capability of the company to generate sufficient revenue so as to cover its variable cost.

To compute: Jeans to sell to reach break-even point.

2.

a.

To determine

To compute: Number of jeans to be sold to reach target operating income of $450,000.

b.

To determine

To compute: Number of jeans to be sold to reach net income of $450,000.

3.

To determine

To compute: Jeans to be sold if contribution margin per unit increases by 10%.

b.

To determine

To compute: Jeans to be sold if selling price increased to $32.50.

c.

To determine

To compute: Number of jeans to be sold if variable costs increase by $2 per pair and fixed manufacturing cost decreases by 70%.

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Chapter 3 Solutions

EBK COST ACCOUNTING

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