BUS 1350 – Module 8 Exam 3, 2026 – Study guide and practice
material
Cost-Volume-Profit Analysis - ANS✔✔ a branch of financial analysis that studies the relationship
between expenses, sales volume and profitability
revenue - ANS✔✔ the total income generated from sales of a product or service
variable expenses - ANS✔✔ expenses that change in proportion to the volume of production
fixed expenses - ANS✔✔ expenses that must be paid regardless of sales volume
break even point - ANS✔✔ the point where total revenue equals total expenses
product mix - ANS✔✔ the combination of different products offered by the company to the
consumer
optimal product mix - ANS✔✔ the product mix that maximizes profits subject to constraints on
production and consumer choice
three types of expenses - ANS✔✔ variable
fixed
mixed
variable expense - ANS✔✔ changes in proportion to production volume
fixed expense - ANS✔✔ expenses that must be paid regardless of sales volume (EXAMPLe. rent)
, mixed expenses - ANS✔✔ expenses that are part variable and part fixed such as commissions
paid to sales staff
Cost-Volume-Profit Analysis (2 things about it) - ANS✔✔ studies the relationship between
expenses, sales volume and profitability
helps predict the effect of cutting overhead or raising prices on a company's net income
break even point - ANS✔✔ the point at which the costs of producing a product equal the
revenue made from selling the product
when sales are above the break even point, a company ____, when sales are below the break
even point, a company ____ - ANS✔✔ profits, loses money
cvp chart - ANS✔✔ chart that shows the relationship between total expenses and total
revenue; the break even point occurs where the 2 lines cross
calculation for break even point - ANS✔✔ fixed costs/ (price per unit)-(variable costs per unit) =
breakeven point
Goal Seek - ANS✔✔ A what-if analysis tool that finds the input needed in one cell to arrive at
the desired result in another cell.
3 things that finding the break even point with what if analysis does: - ANS✔✔ 1- lets you
explore the impact of changing different values in a worksheet
2- can use to explore the impact of changing financial conditions on a company's profitability
3- one way of finding the break-even point is to use goal seek but a more efficient approach is to
use a data table
material
Cost-Volume-Profit Analysis - ANS✔✔ a branch of financial analysis that studies the relationship
between expenses, sales volume and profitability
revenue - ANS✔✔ the total income generated from sales of a product or service
variable expenses - ANS✔✔ expenses that change in proportion to the volume of production
fixed expenses - ANS✔✔ expenses that must be paid regardless of sales volume
break even point - ANS✔✔ the point where total revenue equals total expenses
product mix - ANS✔✔ the combination of different products offered by the company to the
consumer
optimal product mix - ANS✔✔ the product mix that maximizes profits subject to constraints on
production and consumer choice
three types of expenses - ANS✔✔ variable
fixed
mixed
variable expense - ANS✔✔ changes in proportion to production volume
fixed expense - ANS✔✔ expenses that must be paid regardless of sales volume (EXAMPLe. rent)
, mixed expenses - ANS✔✔ expenses that are part variable and part fixed such as commissions
paid to sales staff
Cost-Volume-Profit Analysis (2 things about it) - ANS✔✔ studies the relationship between
expenses, sales volume and profitability
helps predict the effect of cutting overhead or raising prices on a company's net income
break even point - ANS✔✔ the point at which the costs of producing a product equal the
revenue made from selling the product
when sales are above the break even point, a company ____, when sales are below the break
even point, a company ____ - ANS✔✔ profits, loses money
cvp chart - ANS✔✔ chart that shows the relationship between total expenses and total
revenue; the break even point occurs where the 2 lines cross
calculation for break even point - ANS✔✔ fixed costs/ (price per unit)-(variable costs per unit) =
breakeven point
Goal Seek - ANS✔✔ A what-if analysis tool that finds the input needed in one cell to arrive at
the desired result in another cell.
3 things that finding the break even point with what if analysis does: - ANS✔✔ 1- lets you
explore the impact of changing different values in a worksheet
2- can use to explore the impact of changing financial conditions on a company's profitability
3- one way of finding the break-even point is to use goal seek but a more efficient approach is to
use a data table
