CVP chart is the graphical representation of CVP analysis. In CVP chart the no. of units produced are plotted on X-axis and cost on Y-axis. If we plot the fixed cost on Y-axis than a straight horizontal line is drawn because fixed costs remain same in totality at each level of activity. If we plot the variable cost line on Y-axis then there will be positive upward slop that will rise with the increase in activity level. To determine: In the given question we have to determine that the positive slope line that rises at each additional unit of volume what represents.

Question

Want to see the full answer?

Answer 1

Question

Chapter 21, Problem 15DQ

To determine

CVP chart is the graphical representation of CVP analysis. In CVP chart the no. of units produced are plotted on X-axis and cost on Y-axis.

If we plot the fixed cost on Y-axis than a straight horizontal line is drawn because fixed costs remain same in totality at each level of activity.

If we plot the variable cost line on Y-axis then there will be positive upward slop that will rise with the increase in activity level.

To determine:

In the given question we have to determine that the positive slope line that rises at each additional unit of volume what represents.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Reciprocal Method Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments: Support Departments Producing Departments General Factory Receiving Assembly Finishing Direct overhead $400,000 $150,000 $45,000 $71,000 Square footage 2,700 5,400 5,400 Number of receiving orders 300 1,680 1,020 Direct labor hours 25,000 40,000 Required: 1. Allocate the overhead costs of the support departments to the producing departments using the reciprocal method. (Round allocation ratios to two decimal places. Round allocated costs to the nearest dollar. If an amount is zero, enter "0".) Allocation ratios: Square footage General Factory Receiving Assembly Finishing 0 0 Number of receiving orders 0.10 0 0.56 0.34 Allocations: Direct overhead cost General Factory Receiving Total General Factory Receiving Assembly Finishing $ $ $ $ 400,000 150,000 45,000 71,000 $ $ $ $ 2. Using direct labor hours, compute departmental overhead…

?!

Windsor Fabrication estimates its manufacturing overhead to be $720,000 and its direct labor costs to be $600,000 for year 5. Windsor worked three jobs for the year. Job 5-1, which was sold during year 5, had actual direct labor costs of $180,000. Job 5-2, which was completed but not sold at the end of the year, had actual direct labor costs of $270,000. Job 5-3, which is still in work-in-process inventory, had actual direct labor costs of $150,000. The actual manufacturing overhead for year 5 was $700,000. Manufacturing overhead is applied on the basis of direct labor costs. a) How much overhead was applied to each job in year 5? b) What was the over- or underapplied manufacturing overhead for year 5?