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Accounting Final

Chapter 11

the manner in which a cost changes as a related activity changes cost behavior
costs that vary in proportion to changes in the activity base variable cost
when the activity base is units produced, direct materials and direct labor costs are normally classified as... variable costs
costs that remain the same in total dollar amount as the activity base changes fixed costs
costs that have characteristics of both a variable and a fixed cost mixed costs
variable cost per unit= difference in total cost/ difference in production
fixed costs= total cost-(variable cost per unit X units produced)
total cost= (variable cost per unit X units produced)+ fixed costs
examination of the relationships among selling prices, sales and production volume, costs, expenses, and profits cost-volume-profit analysis
contribution margin= sales-variable costs
contribution margin-fixed costs= income from operations
contribution margin ratio= contribution margin/ sales
change in income from operations= change in sales dollars X contribution margin ratio
break even sales= fixed costs/ unit contribution margin
to earn a target profit sales= (fixed costs + target profit)/ unit contribution margin
operating leverage= contribution margin/ income from operations
Fixed costs building depreciation, plant manager salary, property insurance, property taxes, branch manager salary
variable costs instructor salaries, fuel, direct materials, wages
Created by: kec0010