Concept Introduction:
Cost Volume Profit (CVP) Analysis:
The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.
Breakeven point is a point of earning by the company where, the company is in a position of no profit - no loss, i.e. the company earns so much that is able to recover fully the variable and fixed cost incurred by it.
Requirement-1:
To Calculate:
The Break Even units in sales for each Company
Concept Introduction:
Cost Volume Profit (CVP) Analysis:
The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.
Breakeven point is a point of earning by the company where, the company is in a position of no profit - no loss, i.e. the company earns so much that is able to recover fully the variable and fixed cost incurred by it.
Requirement-2:
To Indicate:
The company that will face higher decline in profits in case of decline in sales
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Chapter 21 Solutions
FUNDAMENTAL ACCOUNTING PRINCIPLES
- During October, the first month of the fiscal year, sales totaled $750,000, and the cost of merchandise available for sale totaled $680,000. Estimate the cost of the merchandise inventory as of October 31, based on an estimated gross profit rate of 35%. Answerarrow_forwardgeneral accountingarrow_forwardcan you please solve thisarrow_forward
- How much should be recorded on December 31 for the gain or loss?arrow_forwardWhat is the gross income for the year?arrow_forwardAt the beginning of the recent period there were 1,080 units of product in a department, one-third completed. These units were finished and an additional 5,620 units were started and completed during the period. 960 units were still in process at the end of the period. One-fourth completed. Using the weighted-average valuation method the equivalent units produced by the department were____Units.arrow_forward
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