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Bus-A202 Chapter 4
Exam 1
12
Accounting
Undergraduate 2
10/01/2011

Additional Accounting Flashcards

 


 

Cards

Term
Contribution Margin Statement
Definition
recognizes income data by grouping the cost by variability.
Term
Contribution Margin
Definition
the amount that remains after subtracting variable cost from revenue
Term
Cost Structure
Definition
The variable and fixed portions of a company's cost.
Term
Account Classification Method
Definition
involves systematically categorizing a company's cost accounts as fixed or variable
Term
High-Low Method
Definition
uses two observations of aggregate cost data to estimate total fixed cost and variable cost.
Term
High Low Method Equation
Definition
((Total High Cost)-(Total Low Cost))/
((Total High units)-(Total Low Units))
Term
Account Classification Flaws
Definition
It can be very difficult to qualify which cost are variable and which are fixed.
Term
High Low Problems
Definition
It is a rough estimate.
It only uses two points so the room for error is much higher than if they were to use multiple points
Term
Regression Analysis
Definition
a statistical method for estimating fixed and variable cost. Uses all available data to come up with a line of best fit
Term
Evaluation of Regression Analysis
Definition
It makes a lot of assumptions about data, and accounting data sometimes do not satisfy these assumptions.
Term
Relevant Range
Definition
Normal range of operations
Term
Segment Margin
Definition
this is calculated by subtracting fixed cost traceable to a product from its contrbutino margin.
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