- What information provided by a variable costing income statement is used in computing the break-even point? Is this information on an absorption costing income statement? Explain your answer.
- How is “break-even point†defined? What are the differences among the formula, graph, and income statement approaches for computing breakeven?
- What is the contribution margin ratio? How is it used to calculate the break-even point?
- Why is CVP analysis generally used as a short-run tool? Would CVP ever be appropriate as a long-run model?
Friday, October 10, 2014
What is the contribution margin ratio? How is it used to calculate the break-even point?
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