# Study sets matching "cost accounting volume profit"

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Cost behavior analysis

Activity Index

Variable Costs

Does variable cost remain the same per…

The study of how specific costs respond to changes in the leve…

The activity that causes changes in the behavior of costs.

Costs that vary in total directly and proportionately with cha…

Yes

Cost behavior analysis

The study of how specific costs respond to changes in the leve…

Activity Index

The activity that causes changes in the behavior of costs.

What is Cost behavior analysis?

Examples of Cost behavior analysis

How does cost behavior helps management…

What are the starting point in cost beh…

is the study of how specific costs respond to changes in the l…

an airline company such as Southwest or United, the longer the…

plan operations and decide between alternative courses of acti…

Activity levels may be expressed in terms of sales dollars (in…

What is Cost behavior analysis?

is the study of how specific costs respond to changes in the l…

Examples of Cost behavior analysis

an airline company such as Southwest or United, the longer the…

CVP analysis focuses on interactions of…

CVP analysis is a vital tool in making…

What are the basic concepts of CVP anal…

Contribution margin represents amount o…

1. Prices of Products... 2. Volume of level of activity... 3. Per Un…

1. Deciding what products and services to sell... 2. Determining…

1. Break-even... 2. Target profit analysis... 3. Margin of safety... 4.…

1. Pay fixed costs... 2. Contribute toward a profit

CVP analysis focuses on interactions of…

1. Prices of Products... 2. Volume of level of activity... 3. Per Un…

CVP analysis is a vital tool in making…

1. Deciding what products and services to sell... 2. Determining…

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Profitability Analysis

What you need to understand to perform…

Cost Volume Profit Analysis

CVP For Non-Profit Uses

Involves examining the relationships among revenues, costs, an…

- selling prices ... - behavior of cost activity drivers

a technique to examine the relationships among total volume of…

1. Establish Service Level funds ... 2. Plan fundraising events…

Profitability Analysis

Involves examining the relationships among revenues, costs, an…

What you need to understand to perform…

- selling prices ... - behavior of cost activity drivers

Summary of Important Equations

Sales revenue

Profit Equation

Break-even point in units

1. Sales revenue ... 2. Operating income... 3. Break-even point in u…

Price × Units sold

(Price × Units) - (Unit variable cost × Units) - Fixed cost

Total Fixed cost/ Contribution Margin (Price - Unit variable c…

Summary of Important Equations

1. Sales revenue ... 2. Operating income... 3. Break-even point in u…

Sales revenue

Price × Units sold

The amount left from each sale after va…

The minimum quantity of sales which an…

Total revenue -total variable cost or... (…

total revenue -variable costs - fixed c…

Contribution Margin

Breakeven

Total contribution margin formula

Profit formula

The amount left from each sale after va…

Contribution Margin

The minimum quantity of sales which an…

Breakeven

1. Know you cost behaviors (variable an…

2. What are mixed costs?

3. Know how to use the high-low method…

4. Know how to calculate the contributi…

Fixed Cost - total cost that remains the same regardless of th…

Mixed cost are mixtures of fixed cost and variable cost. Quest…

Find the high level of activity and low level of activity. Fin…

Contribution margin ratio = contribution margin ÷ sales revenu…

1. Know you cost behaviors (variable an…

Fixed Cost - total cost that remains the same regardless of th…

2. What are mixed costs?

Mixed cost are mixtures of fixed cost and variable cost. Quest…

Cost Volume Profit Analysis

Contribution Margin

sales revenue - variable costs

selling price per unit - variable costs…

one of the most powerful tools that managers have at their dis…

represents the amount of revenue that is available to:... 1. Pay…

Total Contribution Margin equation

Contribution margin per unit equation

Cost Volume Profit Analysis

one of the most powerful tools that managers have at their dis…

Contribution Margin

represents the amount of revenue that is available to:... 1. Pay…

Activity index

Break-even point

Contribution margin (CM)

Contribution margin ratio

The activity that causes changes in the behavior of costs

The level of activity at which total revenue equals total costs

The amount of revenue remaining after deducting variable costs

The percentage of each dollar of sales that is available to ap…

Activity index

The activity that causes changes in the behavior of costs

Break-even point

The level of activity at which total revenue equals total costs

Cost Volume Profit (CVP) Analysis

Relevant Range of Operations

Fixed Costs

Variable Costs

Helps mangers predict how changes in costs and sales levels af…

The normal operating range for a business

Change in proportion to changes in the volume of activity

Change in Proportion to changes in the volume of activity

Cost Volume Profit (CVP) Analysis

Helps mangers predict how changes in costs and sales levels af…

Relevant Range of Operations

The normal operating range for a business

CVP

Contribution Margin

unit contribution margin

contribution margin ratio

summarizes the effects of changes in volume of an activity on…

sales revenue-variable expenses, goes towards covering fixed c…

used to predict changes in profits and CM for a single product

contribution margin to total sales ratio... how much will be adde…

CVP

summarizes the effects of changes in volume of an activity on…

Contribution Margin

sales revenue-variable expenses, goes towards covering fixed c…

break even analysis

break even point

cost structure

cost volume profit analysis

a form of cost volume profit analysis that determines the leve…

point at which total revenue equals total cost, resulting in 0…

the extent to which a company uses variable costs versus fixed…

analysis that focuses on relationships among revenue, volume a…

break even analysis

a form of cost volume profit analysis that determines the leve…

break even point

point at which total revenue equals total cost, resulting in 0…

variable costs

Contribution margin =

Contribution margin per unit =

Operating income =

Stay constant on a per unit basis as activity changes.

Total revenues - total variable expenses

selling price - variable cost per unit

Contribution margin - fixed costs

variable costs

Stay constant on a per unit basis as activity changes.

Contribution margin =

Total revenues - total variable expenses

Activity index

Break-even point

Contribution margin (CM)

Contribution margin ratio

the activity that cases changes in the behavior of costs.

The level of activity at which total revenue equals total cost…

The amount of revenue remaining after deducting variable costs

the percentage of each dollar of sales that is available to ap…

Activity index

the activity that cases changes in the behavior of costs.

Break-even point

The level of activity at which total revenue equals total cost…

Cost-volume-profit analysis:

Marginal costing:

Marginal costing VS absorption costing:

Contribution (CPU),... Break even point (B…

The study of the relationship between costs and volume(level o…

- Is a decision making approach in which marginal costs are us…

MARGINAL... - divides costs into variable and fixed.... - costs are…

-CONTRIBUTION = Sales - Variable costs... This is the amount of m…

Cost-volume-profit analysis:

The study of the relationship between costs and volume(level o…

Marginal costing:

- Is a decision making approach in which marginal costs are us…

Basic Formula

Incr. in NI

Breakeven in units

Impact on NI

Sales... - VC ... -------...

**CM**... - FC... -------...**NI**a) Sales - VC = CM... b) Sales incr x CM ratio = CM incr.... c) CM i…

a) Sales - VC = CM... b) CM / Sales units = CM per unit... c) FC / C…

a) CM x Sales incr = CM incr... b) CM incr - Ad cost = *impact on…

Basic Formula

Sales... - VC ... -------...

**CM**... - FC... -------...**NI**Incr. in NI

a) Sales - VC = CM... b) Sales incr x CM ratio = CM incr.... c) CM i…

Define total costs

Give examples of fixed costs

What are stepped fixed costs?

Define variable costs

Total Costs = Fixed Costs + Variable Costs

- Rent... - Insurance... - Cleaning Costs... - Staff Salaries

- These are fixed costs that reflect large changes in volume o…

Costs that are zero when output is zero... Examples (for a haird…

Define total costs

Total Costs = Fixed Costs + Variable Costs

Give examples of fixed costs

- Rent... - Insurance... - Cleaning Costs... - Staff Salaries

Cost-Volume-Profit (CVP) Analysis

Contribution Margin

Contribution Margin per Unit

Operating Income

Managers use cost-volume-profit (CVP) analysis to study the be…

CM = total revenues - total variable costs... CM = CMu x Number o…

CMu = selling price - variable cost per unit

OI = CM - FC... OI = (CMr x Revenues) -FC... The income statement in…

Cost-Volume-Profit (CVP) Analysis

Managers use cost-volume-profit (CVP) analysis to study the be…

Contribution Margin

CM = total revenues - total variable costs... CM = CMu x Number o…

Variable cost

Fixed cost

Mixed cost

High low method

Cost that increases or decreases in total in direct proportion…

A cost that remains the same in total regardless of changes ov…

A cost that has both fixed and variable components

A method used to separate mixed costs into their into their va…

Variable cost

Cost that increases or decreases in total in direct proportion…

Fixed cost

A cost that remains the same in total regardless of changes ov…

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Contribution Margin

Contribution Margin Formula

CM per unit

CM ratio

The difference between total revenues and total variable costs…

Sales (per unit)... -All Variable Costs (per unit)... = Contribution…

The difference between the sales price per unit and total vari…

Percentage that gives the amount (in cents) of every sales dol…

Contribution Margin

The difference between total revenues and total variable costs…

Contribution Margin Formula

Sales (per unit)... -All Variable Costs (per unit)... = Contribution…

Cost- volume- profit (CVP) Analysis

Profit Equation (86)

Unit Contribution Margin

Total Contribution Margin

Study of the relations among revenue, cost, and volume and the…

Operating profit equals total revenue less total costs... Operati…

Difference between revenues per unit (price) and the variable…

Difference between revenues and total variable costs.... (P-V)X

Cost- volume- profit (CVP) Analysis

Study of the relations among revenue, cost, and volume and the…

Profit Equation (86)

Operating profit equals total revenue less total costs... Operati…

cost volume profit analysis

components of CVP analysis

CVP Assumptions

contribution margin

-tool that helps managers makes decisions ... -expresses relation…

1. Sales price: the price charged for each poster... 2. Volume: t…

1. Sales price remains constant despite the volume... 2. Managers…

excess of sales revenue over variable expenses

cost volume profit analysis

-tool that helps managers makes decisions ... -expresses relation…

components of CVP analysis

1. Sales price: the price charged for each poster... 2. Volume: t…

CVP analysis

Special format

CVP income statement

break even point in units

the study of the effects of changes in costs and volume on a c…

management often wants the information reported in a (blank) i…

(internal use only) costs and expenses classified as fixed or…

fixed costs divided by unit contribution margin

CVP analysis

the study of the effects of changes in costs and volume on a c…

Special format

management often wants the information reported in a (blank) i…