Questions:
1. Palm has both fixed and variable costs. Why are fixed costs depicted as a horizontal line on a CVP chart?
2. Each of two similar companies has sales of $20,000 and total costs of $15,000 for a month. Company A's total costs include $10,000 of variable costs and $5,000 of fixed costs. If Company B's total costs include $4,000 of variable costs and $11,000 of fixed costs, which company will enjoy more profit if sales double?
3. _______ of _______ reflects expected sales in excess of the level of break-even sales.