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Final
Question | Answer |
---|---|
How many inventories do manufacturing companies have? | 3. |
What are the 3 cost classifications? | 1. VARIABLE COST - total cost change in direct proportion to number of units 2. FIXED COSTS - total cost do not change 3. MIXED COSTS - total costs change, but not in direct proportion to number of units |
What is the cost formula? | TC = VC(X) + TFC |
Define Break-even Point. | Number of units sold when revenues = costs. -0- net income |
How do you find Operating income? | Sales - Variable Costs - Fixed Costs SP(X) - VC(X) - TFC = OI |
How do you find the Contribution Margin? | 1. Sales - Total Variable Costs 2. Selling price per unit - Variable cost per unit |
A budgeted income statement separates costs into what 2 categories? | Variable and Fixed |
What is a budget report? | Compares actual results with budget each month. Difference between actual & budget call variances. |
What is a budget and why would an organization prepare one? | An estimate of estimated revenues & expenses by month. To communicate expectations |