Components of cost-volume-profit analysis


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.

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Accounting Basics: Components of cost-volume-profit analysis
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