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October 4, 2022

Cost-Volume-Profit (CVP) Analysis

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Discuss your answers to the following questions:

Would an increase in variable costs per unit cause a company’s break-even point to increase or decrease? Why?

Would an increase in unit selling price cause a company’s break-even point to increase or decrease? Why?

An examination of the accounting records of Alinma Company disclosed a high contribution margin ratio and production at a level below maximum capacity. Based on this information, discuss a likely means of improving operating income. Explain your answer by sharing the calculations needed.

Both Alireza Company and Jarir Company had the same unit sales, total costs, and operating income for the current fiscal year; yet, Alireza Company had a lower break-even point than Jarir Company.Discuss the reason for this difference in break-even points and provide and example of this calculation.

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