ACC 220 Week 6 Assignment – Cost, Volume & 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?
? Post your paper as a Microsoft© Word attachment.