Cost Behavior: Analysis and Use. Topics include understanding the impact of a change in activity on variable costs and per unit variable costs; fixed costs and per unit fixed costs, and preparing an income statement using the contribution format.
Cost-Volume-Profit Relationships: Topics include how changes in economic activity can impact contribution margin and net income; examining the impact on contribution margin from changes in variable costs, fixed costs, selling price, and volume; computing break-even points by the equation method and the contribution margin method; and using the CVP formula to determine the activity levels required for a given target profit.
Identifying Relevant Costs: Topics include how to distinguish between relevant and irrelevant costs in the decisions; preparing an analysis showing whether to keep or replace old equipment; analysis to determine whether a product line or segment should be retained or dropped; preparing a well-organized make or buy analysis; and determine the most profitable use of a constrained resource.
