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ACC220 / ACC 220 / Assignment: Cost, Volume, and Profit Formulas

# ACC220 / ACC 220 / Assignment: Cost, Volume, and Profit Formulas

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Assignment: Cost, Volume, and Profit Formulas
· Resources: Ch. 6 of Essentials of Accounting
· Due Date: Day 7 [Individual] forum
· Review the following illustrations found in Ch. 6 of your text: 6-12, 6-15, 6-17, 6-18, 6-19,
& 6-20.
· Write a 350- to 700-word paper, using APA guidelines, that addresses the following:
o Explain the components of cost-volume-profit analysis.
o What does each of the components mean?
o Based on the formulas you have reviewed, what happens to contribution margin per
unit when unit selling prices increase? Illustrate your explanation with an example
from a fictitious company of how an increase in unit selling prices might affect
contribution margin.
o When fixed costs decrease, what does this do for sales? Illustrate your explanation
with an example from a fictitious company.
o Define contribution ratios.
o What happens to contribution ratios as one of the components changes?
Assignment: Cost, Volume, and Profit Formulas
· Resources: Ch. 6 of Essentials of Accounting
· Due Date: Day 7 [Individual] forum
· Review the following illustrations found in Ch. 6 of your text: 6-12, 6-15, 6-17, 6-18, 6-19,
& 6-20.
· Write a 350- to 700-word paper, using APA guidelines, that addresses the following:
o Explain the components of cost-volume-profit analysis.
o What does each of the components mean?
o Based on the formulas you have reviewed, what happens to contribution margin per
unit when unit selling prices increase? Illustrate your explanation with an example
from a fictitious company of how an increase in unit selling prices might affect
contribution margin.
o When fixed costs decrease, what does this do for sales? Illustrate your explanation
with an example from a fictitious company.
o Define contribution ratios.
o What happens to contribution ratios as one of the components changes?

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