Term
|
Definition
| is the level of sales at which profit is zero |
|
|
Term
| If sales are zero, the company's loss would = its ________________ |
|
Definition
|
|
Term
| CMR Ratio= 40% What does that mean? |
|
Definition
| for every $1 in sales CM is increased by 40 cents |
|
|
Term
| Margin of Safety definition |
|
Definition
is the excess of budgeted sales dollars over the break-even volume of sales dollars
It is the amount by which sales can drop before losses are incurred. |
|
|
Term
|
Definition
| a measure of how a percentage change in sales volume will affect profits. |
|
|
Term
|
Definition
| An analytical approach that focuses only on those costs and revenues that change as a result of a decision. |
|
|
Term
|
Definition
| The relative proportions in which a company's products are sold. Sales mix is computed by expressing the sales of each product as a percentage of total sales. |
|
|
Term
| Assumptions Underlying CVP Analysis |
|
Definition
| Selling Price is constant, Costs are linear, Sales Mix is constant, Inventories do not change |
|
|
Term
| Break-Even Analysis assumes that.. |
|
Definition
| Unit Variable Expense is constant |
|
|
