# Shared Flashcard Set

## Details

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

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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