How changes in costs sales volume and price affect profit

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Reference no: EM133465454

Discussion Board

Question I: Describe the differences between process costing and job-order costing. Or provide an example of each. Cost-volume-profit (CVP) analysis estimates how changes in costs (both variable and fixed), sales volume, and price affect a company's profit.

Question II: Suppose a firm with a contribution margin ratio of 0.3 increased its advertising expenses by $10,000 and found that sales increased by $30,000. Was it a good decision to increase advertising expenses? Suppose that the contribution margin ratio is now 0.4. Would it be a good decision to increase advertising expenses?

Reference no: EM133465454

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