# Study sets matching "managerial accounting cost volume"

Study sets

Diagrams

Classes

Users

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…

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

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…

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Cost Behavior

Variable Cost

Fixed Cost

Relevant Range

Refers to the way a cost changes in relation to a change in bu…

Costs that vary in direct proportion to an activity level, suc…

Are cost that remain constant even if an activity level change…

Cost behavior is valid only within a level of activity

Cost Behavior

Refers to the way a cost changes in relation to a change in bu…

Variable Cost

Costs that vary in direct proportion to an activity level, suc…

3 categories of manufacturing costs

Direct Materials

Cost Object

2 categories of cost object

-direct materials... -direct labor... -manufacturing overhead

easily traceable and become an essential part of the finished…

anything for which cost data are desired

-direct costs... -indirect costs

3 categories of manufacturing costs

-direct materials... -direct labor... -manufacturing overhead

Direct Materials

easily traceable and become an essential part of the finished…

sales revenue

operating income

Unit Contribution margin

Total Contribution Margin

price X units sold

(Price X units sold)-(VC/unit X units sold)- total FC

Price per unit - Unit VC

sales- total variable cost

sales revenue

price X units sold

operating income

(Price X units sold)-(VC/unit X units sold)- total FC

Break-Even Point

Contribution Margin

Contribution Margin Format

Contribution Margin Ratio

The amount of revenue required to have neither operating profi…

The difference between revenues and variable costs

An income statement format in which variable costs are subtrac…

The ratio of contribution margin to revenues

Break-Even Point

The amount of revenue required to have neither operating profi…

Contribution Margin

The difference between revenues and variable costs

Cost-Volume-Profit Analysis

Break-Even Point

Contribution Margin Income Statement

Contribution Margin

Estimates how changes in costs, sales volume, and price affect…

The point where total revenue equals total cost.

The income statement format that is based on the separation of…

The difference between sales and variable expense.

Cost-Volume-Profit Analysis

Estimates how changes in costs, sales volume, and price affect…

Break-Even Point

The point where total revenue equals total cost.

Revenues

Variable cost

Contribution Margin

Profit planning

Equals the number of units sold multiplied by the price per un…

Equals the number of units sold multiplied by the unit variabl…

The appropriate measure for evaluating short term decisions

How to determine what volume a business must generate to ensur…

Revenues

Equals the number of units sold multiplied by the price per un…

Variable cost

Equals the number of units sold multiplied by the unit variabl…

CVP Analysis

Components of CVP Analysis

Assumptions underlying CVP Analysis

Contribution Margin

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

Sales Price... Volume ... Variable Cost... Fixed Cost... Profit or Loss

1. A change in volume is the only factor that affects costs.... 2…

is calculated as excess sales revenues over variable expenses…

CVP Analysis

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

Components of CVP Analysis

Sales Price... Volume ... Variable Cost... Fixed Cost... Profit or Loss

Cost Volume Profit Analysis (CVP Analys…

Cost Behavior Analysis

Cost Volume Graph

Total Variable Costs

Used to study the relationships among sale costs (revenue and…

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

One of the most useful tools for analyzing the relationship be…

Change proportionately with changes in the volume of activity.…

Cost Volume Profit Analysis (CVP Analys…

Used to study the relationships among sale costs (revenue and…

Cost Behavior Analysis

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

Contributional Margin

Cost-Volume-Profit Relationship in Equa…

Contribution Margin Ratio

Change in Contribution Margin

is a product's price minus all associated variable costs, resu…

Profit= (Sales-Variable Expenses) - Fixed Expenses... Broken Down…

CM Ratio = Contribution Margin/Sales

Change in Contribution Margin = CM Ratio * Change in Sales

Contributional Margin

is a product's price minus all associated variable costs, resu…

Cost-Volume-Profit Relationship in Equa…

Profit= (Sales-Variable Expenses) - Fixed Expenses... Broken Down…

Cost volume profit analysis

Components of CVP analysis

Sales mix

Assumptions that must be met for the CV…

Expresses the relationships among costs, volume, and profit or…

Sales price.... Volume.... Variable Costs.... Fixed costs.... Profit or lo…

The combination of products that make up total sales

A change in volume is the only factor that affects costs.... Mana…

Cost volume profit analysis

Expresses the relationships among costs, volume, and profit or…

Components of CVP analysis

Sales price.... Volume.... Variable Costs.... Fixed costs.... Profit or lo…

The Break-Even Point

Equation Approach Formula

Contribution Margin Approach Formula

Contribution Margin Ratio

the point in the volume of activity where revenue equals expen…

(Unit Sales Price - Unit Variable Expense) x Units Sold - Fixe…

Fixed Expenses / Unit Contribution Margin... gives you break eve…

Contribution Margin / Sales

The Break-Even Point

the point in the volume of activity where revenue equals expen…

Equation Approach Formula

(Unit Sales Price - Unit Variable Expense) x Units Sold - Fixe…

Cost Volume Profit (CVP) Analysis

Contribution Margin

Contribution Margin Ratio

Break even point in UNITS

the study of the effect of changes in costs and volume on a co…

amount of revenue remaining after deducting variable costs... sa…

contribution margin / sales

fixed costs / unit contribution margin ... ($200,000 / 200) = 1,0…

Cost Volume Profit (CVP) Analysis

the study of the effect of changes in costs and volume on a co…

Contribution Margin

amount of revenue remaining after deducting variable costs... sa…

Break-Even Point

Contribution Margin

Contribution Format

Cost Behavior Pattern

amount of revenue required to have neither operating profit no…

difference b/w revenues and variable costs

IS format in which variable costs are subtracted from revenues…

ID of whether a cost is fixed or variable

Break-Even Point

amount of revenue required to have neither operating profit no…

Contribution Margin

difference b/w revenues and variable costs

Cost-Volume-Profit Analysis (CVP Analys…

Break-Even Point

Total Contribution Margin

Unit Contribution Margin

summarizes the effects of changes in an organization's VOLUME…

The volume of activity where the organization's revenues and e…

total sales revenue minus total variable expenses

Amount that remains of a unit's price after variable expenses…

Cost-Volume-Profit Analysis (CVP Analys…

summarizes the effects of changes in an organization's VOLUME…

Break-Even Point

The volume of activity where the organization's revenues and e…

break-even point

contribution margin per unit

contribution margin ratio

cost-plus pricing

sales volume at which total revenue equals total cost; can be…

the sales price per unit minus the variable cost per unit

the contribution margin per unit divided by the sales price pe…

strategy that sets the selling price at cost plus a markup equ…

break-even point

sales volume at which total revenue equals total cost; can be…

contribution margin per unit

the sales price per unit minus the variable cost per unit

Total Contribution Margin... /Sales

Unit Contribution margin... /Price

Total fixed Expenses... /Contribution Marg…

Sales-Break Even Sales

Contribution Margin Ratio #1

Contribution Margin Ratio #2

Break-Even Sales

Margin of Safety

Total Contribution Margin... /Sales

Contribution Margin Ratio #1

Unit Contribution margin... /Price

Contribution Margin Ratio #2

Purchase price variance

Industry volume variance

Market share variance

Sales mix revenue

Price variance based on the quantity of material purchased

Portion of the sales activity variance due to changes in indus…

Portion of the activity variance due to changes in the company…

Variance arising from the relative proportion of different pro…

Purchase price variance

Price variance based on the quantity of material purchased

Industry volume variance

Portion of the sales activity variance due to changes in indus…

Decentralization

Principal-agent relationship

Centralized

Decentralized

Delegation of decision-making authority to a subordinate

Relationship between a superior, referred to as the principal,…

Description of those organizations in which decisions are made…

Description of those organizations in which decisions are spre…

Decentralization

Delegation of decision-making authority to a subordinate

Principal-agent relationship

Relationship between a superior, referred to as the principal,…

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Direct Costs

Indirect Costs

Direct materials

Direct Labor

costs that can be easily traced to a unit of product or other…

costs that cannot be easily traced to a unit of a product or o…

are raw materials that become an integral part of the product…

Costs are labor costs that can be easily traced to individual…

Direct Costs

costs that can be easily traced to a unit of product or other…

Indirect Costs

costs that cannot be easily traced to a unit of a product or o…

Cost Behaviors

3 types of costs in cost behavior analy…

Variable costs IN TOTAL change in _____…

Variable Costs PER UNIT are __________…

Term used to describe how costs change to changes in volume of…

Variable, Fixed, Mixed

Direct Proportion

Constant

Cost Behaviors

Term used to describe how costs change to changes in volume of…

3 types of costs in cost behavior analy…

Variable, Fixed, Mixed

Activity-based cost management

Process reengineering

Lean manufacturing

Lean accounting

Approach that uses activity based costing data to evaluate the…

Changing operational processes to improve performance, often a…

Approach to production that looks to significantly reduce prod…

Cost accounting system designed around the value chains of maj…

Activity-based cost management

Approach that uses activity based costing data to evaluate the…

Process reengineering

Changing operational processes to improve performance, often a…

Operating budgets

Financial budgets

Variance

Favorable variance

Budgeted income statement, production budget, budgeted cost of…

Budgets of financial resources, for example, the cash budget a…

Different between planned result and actual outcome

Variance that, taken along, results in an addition to operatin…

Operating budgets

Budgeted income statement, production budget, budgeted cost of…

Financial budgets

Budgets of financial resources, for example, the cash budget a…