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ACC202 Managerial Accounting Module 2 – SLP

COST BEHAVIOR AND COST-VOLUME-PROFIT ANALYSIS

This assignment consists of three independent scenarios for which computations should be shown.

Scenario A

Compute the break-even point in sales dollars if fixed costs are $200,000 and the total contribution margin is 10% of revenue.

Show the analysis in a table format. Write a one-paragraph interpretation of the information presented in the table.

Scenario B

Danny Company makes and sells stuffed animals. One product, Panda Bear, sells for $28 per bear. Panda Bears incur fixed costs of $120,000 per month and a variable cost of $12 per bear. How many Panda Bears must be produced and sold each month to break even?

Show the analysis in a table format. Write a one-paragraph interpretation of the information presented in the table.

Scenario C

Jerry is considering buying a company if it will break even or earn net income on revenues of $100,000 per month. The company that Jerry is considering sells each unit it produces for $5. Use the following cost data to compute the variable cost per unit and the fixed cost for the period. Calculate the break-even point in sales dollars. Should Jerry purchase this company?

Volume (units) Total Cost
8,000 $70,000
68,000$190,000


Scenario C is more involved than the other three. HINT: You can use the high-low method to determine the fixed and variable portions of the total costs. See for example http://www.principlesofaccounting.com/chapter-18/behavior-analysis/ (from the optional resource in the background material).

Show the analysis in a table format. Write a one-paragraph interpretation of the information presented in the table.

SLP Assignment Expectations


Show computations in good format and explain answers as required. Excel is a great tool to make computations and present financial information in an easy-to-understand format. Write comments below the computations in Excel. Submit only the Excel file. Both content and the clarity of the presentation will be evaluated for grading purposes.

ACC202 Managerial Accounting Module 2 – Case

COST BEHAVIOR AND COST-VOLUME-PROFIT ANALYSIS

Assignment Overview

Review the three components in the background material to answer the questions and make computations relating to cost behavior and break-even analysis.

Case Assignment

Part 1

Ten Short-Answer Questions

  1. Differentiate between variable and fixed costs. Describe the two major behavior patterns. What if a cost has characteristics of both patterns?
  2. What is meant by the term break-even point? What is a potential benefit of calculating break-even?
  3. Why is the concept of relevant range crucial for understanding fixed-cost behavior?
  4. What is the formula for calculating the break-even point in sales revenue?
  5. What formula is used to solve for the break-even point in units?
  6. How can the break-even formula be altered to calculate the number of units that must be sold to achieve a desired level of income (target income)? Show the formula and explain.
  7. What effect would you expect the mechanization and automation of production processes to have on the break-even point?
  8. Why might a business wish to lower its break-even point? How would it go about lowering the break-even point?
  9. Describe three ideas that can lower the break-even point and include a simple example with numbers.

Part II

Real-World Example

Review the background material and do some research to find a real-world example where cost-volume-profit analysis was applied or could be applied. Information can be found in the news, research papers, and on investment sites. Another option is to locate the financial statements for a company, make some assumptions, and prepare your own break-even analysis from an external point of view. Describe the situation and the results. Show computations when appropriate.

Assignment Expectations

Part I

Write 3–5 sentences for each question.

Part II

Write an essay (300–500 words).

Show sources when appropriate and APA format is suggested, but not required.

Discussion: Employment Discrimination in the News

To receive full credit for the discussion, you must enter a minimum of three quality posts (your own initial post, and responses to two classmates). Also, be sure to cite at least one source in your initial post.

The word discrimination drawn on a glass wall.

The U.S. Equal Employment Opportunity Commission (EEOC) classifies discrimination by type with the following list: age, disability, equal pay/compensation, genetic information, harassment, national origin, pregnancy, race/color, religion, retaliation, sex, and sexual harassment. Recently, the United States Supreme Court announced that it was accepting three cases for its 2019-2020 session to determine whether sexual orientation and transgender should be explicitly included. States often have additional categories, for example, adding sexual orientation or political views.

For this Module 3 discussion, for your initial post, do some internet research and find a wrongful termination or other employment case that alleges discrimination based on one of the EEOC types of discrimination or an additional state type. Tell us about the case and look at it from the employer’s point-of-view. What should the employer have done differently? Or did the employer act appropriately and is the discrimination claim lacking in merit? In your replies to initial posts from your classmates, take a constructive approach and let’s see what we can learn from and suggest about these cases to work towards reducing discrimination in the workplace.

U.S. EEOC. Discrimination by Type. Retrieved from https://www.eeoc.gov/laws/types/index.cfm