Cost-volume-profit relationships and variable costing

Please answer the questions below completely and explain your answers.

  1. Explain what is the contribution margin ratio and examine how it is used in managerial decision-making.
  2. Examine how the break-even point would change for each scenario: (a) the selling price per unit increases; (b) fixed cost decreases throughout the entire range of activity; (c) variable cost per unit decreases.
  3. Compare and contrast between variable costing and absorption costing.
  4. Explain and give examples of computing unit product cost under variable costing and absorption costing?
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