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Contribution Margin Ratio= 

Definition
=Contribution Margin / Sales 


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Definition
the ratio of variable expenses to sales 


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Dollar sales to attain a target profit 

Definition
(Target Profit + Fixed Expenses) / CM Ratio 


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Unit Sales to break even = 

Definition


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Unit Sales to attain the target profit 

Definition
(Target Profit + Fixed Expenses) / Unit CM 


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=total sales / break even 


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Definition
a method for analyzing cost behavior in which an account is classified as either variable or fixed based on the analyst's prior knowledge of how the cost in the account behaves. 


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a measure of whatever causes the incurrence of a variable cost. For example, the total cost of XRay film in a hospital will increase as the number of xrays taken increases. Therefore the number of xrays is the activity base that explains the total cost of xray film. 


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Investments in facilities, equipment, and basic organizational structure that can't be significantly reduced even for short periods of time without making fundamental changes. 


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An income statement format that organizes costs by their behavior. Costs are separated into variable and fixed categories rather than being separated according to organizational functions. 


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the amount remaining from sales revenue after all variable expenses have been deducted. 


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the relative proportion of fixed, variable, and mixed costs in an organization. 


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respond to some casual factor; total cost is the dependent variable as represented by the letter Y, in the equation Y=a+bx 


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fixed costs that arise from annual decisions by management to spend on certain fixed cost items, such as advertising and research. 


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a detailed analysis of cost behavior based on an industrial engineer's evaluation of the inputs that are required to carry out a particular activity and of the prices of those inputs. 


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a method separating a mixed cost into its fixed and variable elements by fitting a regression line that minimizes the sum of the squared errors. 


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Definition
acts as a casual factor, activity is the independent variable, as represented by letter X, in the equation Y=a+bx 


Term
Least Squares Regression Method 

Definition
a method of separating a mixed cost into its fixed and variable elements by fitting a regression line that minimizes the sum of the squared errors 


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Cost behavior is said to be linear whenever a straight line is a reasonable approximation for the relation between cost and activity. 


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contains both variable and fixed cost elements 


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an analytical method required when variations in a dependent variable are caused more than one factor. 


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A measure of goodness of fit in leastsquares regression analysis. It is the percentage of the variation in the dependent variable that is explained by variation in the independent variable. 


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The range of activity within which assumptions about variable and fixed cost behavior are reasonably valid. 


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the cost of a resource that is obtained in large chunks and that increases and decreases only in response to fairly wide changes in activity. 

