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Chapter 19

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CHAPTER 19
Cost-Volume-Profit Analysis: Additional Issues
ASSIGNMENT CLASSIFICATION TABLE
Brief Exercises 1, 2, 3, 4, 5, 6 A Problems 1A, 2A B Problems 1B, 2B

Study Objectives 1. Describe the essential features of a cost-volume-profit income statement. Apply basic CVP concepts.

Questions 1, 2, 3, 4

Do It! 1

Exercises

2.

2, 4, 5, 6

1, 2, 3, 4, 5, 6 7, 8, 9, 10 11, 15

2

1, 2, 3, 4, 5 6, 7, 8, 9, 10 11, 12, 13

1A, 2A, 4A, 6A 4A

1B, 2B, 4B, 6B 4B

3.

Explain the term sales mix and its effects on break-even sales. Determine sales mix when a company has limited resources. Understand how operating leverage affects profitability. Explain the difference between absorption costing and variable costing. Discuss net income effects under absorption costing versus variable costing. Discuss the merits of absorption versus variable costing for management decision making.

7, 8, 9

3

4.

10, 11

4

3A

3B

5.

12, 13, 14, 15, 16 17

12, 13, 14

14, 15, 16

5A, 6A

5B, 6B

*6.

16, 17, 18

17, 18, 19

7A, 8A

7B, 8B

*7.

19, 20, 21, 22

19

18

7A, 8A

7B, 8B

*8.

18

8A

8B

Copyright © 2011 John Wiley & Sons, Inc.

Kimmel, Accounting, 4/e, Solutions Manual

(For Instructor Use Only)

19-1

ASSIGNMENT CHARACTERISTICS TABLE
Problem Number 1A 2A Description Compute break-even point under alternative courses of action. Compute break-even point and margin of safety ratio, and prepare a CVP income statement before and after changes in business environment. Determine sales mix with limited resources. Determine break-even sales under alternative sales strategies and evaluate results. Compute degree of operating leverage and evaluate impact of operating leverage on financial results. Determine contribution margin, break-even point, target sales, and degree of operating leverage.

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