Questions:
1. Explain how CVP analysis can be used for managerial planning.
2. Describe the difference between the units-sold approach to CVP analysis and the sales-revenue approach.
3. Define the term break-even point.
4. Explain why contribution margin per unit becomes profit per unit above the break-even point.
5. A restaurant owner who had yet to earn a monthly profit said, "The busier we are, the more we lose." What do you think is happening in terms of contribution margin?