Shared Flashcard Set

Details

Survey of Accounting 4e
Chapter 11 Cost Behavior and Cost Volume Profit Analysis
18
Accounting
Graduate
12/01/2008

Additional Accounting Flashcards

 


 

Cards

Term
Activity base
Definition
A measure of activity that is related to changes in cost and is used in the denominator in calculating the predetermined factory overhead rate to assign factory overhead costs to cost objects.
Term
Break-even point
Definition
The level of business operations at which revenues and expired costs are equal.
Term
Contribution margin
Definition
Sales less variable cost of goods sold and variable selling and administrative expenses.
Term
Contribution margin ratio
Definition
The percentage of each sales dollar that is available to cover the fixed costs and provide income from operations.
Term
Cost behavior
Definition
Cost behavior The manner in which a cost changes in relation to its activity base (driver).
Term
Cost-volume-profit analysis
Definition
The systematic examination of the relationships among costs, expenses, sales, and operating profit or loss.
Term
Cost-volume-profit chart
Definition
A chart used to assist management in understanding the relationships among costs, expenses, sales, and operating profit or loss.
Term
Fixed costs
Definition
Costs that tend to remain the same in amount, regardless of variations in the level of activity.
Term
High-low method
Definition
A technique that uses the highest and lowest total cost as a basis for estimating the variable cost per unit and the fixed cost component of a mixed cost.
Term
Margin of safety
Definition
The difference between current sales revenue and the sales at the break even point.
Term
Mixed cost
Definition
A cost with both variable and fixed characteristics.
Term
Operating leverage
Definition
A measure of the relative mix of a business’s variable costs and fixed costs, computed as contribution margin divided by income from operations.
Term
Profit-volume chart
Definition
A chart used to assist management in understanding the relationship between profit and volume.
Term
Relevant range
Definition
The range of activity over which changes in cost are of interest to management.
Term
Sales mix
Definition
The relative distribution of sales among the various products available for sale.
Term
Unit contribution margin
Definition
The dollars available from each unit of sales to cover fixed costs and provide income from operations.
Term
Variable costing
Definition
A method of reporting variable and fixed costs that includes only the variable manufacturing costs in the cost of the product.
Term
Variable costs
Definition
Costs that vary in total dollar amount as the level of activity changes.
Supporting users have an ad free experience!