# ACCT346 Discussions Week 3

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ACCT346 Discussions Week 3
Discuss the difference between variable costing and full costing. Why would income computed under…

SKU: ACCT 346 Cost-Volume-Profit Analysis Variable Full Costing Discussions Week 3 Categories: ,

## ACCT346 Discussions Week 3

ACCT346 Discussions Week 3

All Students Post 95 Pages

Cost-Volume-Profit Analysis – 49 Pages

Based on your ebook readings and review of both the lecture and Becker content, discuss the basic assumptions of CVP analysis and how we can use CVP analysis as managers in making decisions.  Since the break-even point represents the point at which the company makes zero profit, why would a company have any interest in it?  How could managers use the break-even point when introducing a new product?…

This problem uses the ideas we have learned in week 1 and now week 3.
You just started to work for a new company that sells tee shirts that reads ” I Passed Accounting”. Selling price is \$10 per shirt; variable cost is \$4 per shirt and fixed costs are \$60,000. Compute the number of tee shirts to A) break-even; and the number B) to earn a profit of \$24,000.

Variable Costing and Full Costing – 46 Pages

Discuss the difference between variable costing and full costing. Why would income computed under full costing exceed income computed under variable costing if production exceeds sales?… When would a company choose to use a full costing income statement and when would it use a variable costing income statement? What are the ramifications of each?

Why doesn’t GAAP allow variable costing financial statements for external use?

Problem #2 emphasizing the difference between full costing and variable costing:
A company has fixed manufacturing costs of \$2,000,000 and produces 600,000 units and sells 500,000 units. There is no beginning inventory. (Of course the ending inventory is the difference of 600,000-500,000 or 100,000 units.)
What differences, using numbers from this problem, not general concepts, would we see in the variable and full costing statements? WHY?(Be sure to review the concepts in the chapter…