22107 Chapter Notes - Chapter 3 & 9: Activity-Based Costing, Cost Driver, Income Statement
Document Summary
Mixed cost - part variable and part xed. Expenses are classi ed either variable or xed. Sales price, unit variable cost and total xed expense will not vary within the relevant range. Sales mix remains unchanged during the period. Conventional income statement: sales - cogs = gross margin, gross margin - operating expenses = net pro t. Contribution margin income statement: sales - variable expenses = contribution margin, contribution margin - fixed expenses = net pro t. Operating leverage - the measure of the proportion of xed costs in a company"s cost structure. Budgeting: planning - developing objectives and goals, operating - day-to-day management decisions, control - ensuring that objectives and goals are met, comparing actual to budget. Disbursement of cash for manufacturing costs of purchases on inventory. Sales forecast - help in the preparation or production budgets (for manufacturers) and purchases budgets (for merchandisers) Sales budget - key component used in overall planning.
