ACTG 1P12 Lecture Notes - Lecture 13: Contribution Margin, Fixed Cost, Earnings Before Interest And Taxes

45 views6 pages

redmosquito980

16 Apr 2018

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Examines the behaviour of total revenues, total costs and operating income as changes occur in the output level, selling price, variable costs or fixed costs. Inventory levels remain constant all units produced are sold. The amount of revenue that remains after variable costs have been deducted: total amount, per unit basis. Contribution margin/unit = selling price (sp) variable cost per unit (vc) Contribution margin percentage = c(cid:2925)(cid:2924)(cid:2930)(cid:2928)i(cid:2912)(cid:2931)(cid:2930)i(cid:2925)(cid:2924) m(cid:2911)(cid:2928)(cid:2917)i(cid:2924) p(cid:2915)(cid:2928) (cid:2905)(cid:2924)i(cid:2930) (cid:4666)(cid:2903)p (cid:2906)c(cid:4667) (cid:2903)(cid:2915)lli(cid:2924)(cid:2917) p(cid:2928)i(cid:2913)(cid:2915) p(cid:2915)(cid:2928) (cid:2905)(cid:2924)i(cid:2930) Contribution margin per unit is constant because both revenue and variable costs per unit have been defined as being constant. Total contribution margin fluctuates in direct proportion to sales volume. Naylor manufacturing inc. sold 8000 units and recorded sales of 000 for the first month of: in making the sales, the company incurred the following costs and expenses: 40 000: prepare an income statement, calculate the contribution margin per unit, calculate the contribution margin ratio.

Related Questions

Cost-volume-profit (CVP)

posted Nov 28, 2016, 4:07 AM

Cost-volume-profit (CVP) analysis is a key step in manydecisions. CVP analysis involves specifying a model of therelations among the prices of products, the volume or level ofactivity, unit variable costs, total fixed costs, and the salesmix. This model is used to predict the impact on profits of changesin those parameters. Explain how changes in activity affectcontribution margin and net operating income.

sapphireprairie-dog466

Name the definitions given below:

______________	1.	Technique that examines changes inprofits in response to changes in sales volumes, costs, andprices.
______________	2.	Percent by which the selling price (orrevenue) per unit exceeds the variable cost per unit, orcontribution margin as a percent of revenue.
______________	3.	Diagram of the relationship betweentotal revenues and total costs; illustrates how an organizationâsprofits are expected to change under different volumes ofactivity.
______________	4.	Index of the extent to which the costfunction is made up of fixed costs.
______________	5.	Total revenue minus total variable costs.
______________	6.	Proportion of different products or services that anorganization sells.
______________	7.	Excess of an organizationâs expectedfuture sales (in either revenue or units) above the breakevenpoint.
______________	8.	The level of activity where equal costor profit occurs across multiple alternatives.
______________	9.	Selling price per unit minus variablecost per unit.
______________ 10.		Level of operating activity at whichrevenues cover all fixed and variable costs and there is noprofit.
______________ 11.		Margin of safety as a percentage ofactual or estimated sales (units or revenues).
______________ 12.		A systematic tendency for people to beoverly optimistic about the outcomes of their plans andprojects.

Name the definitions given below:

______________	1.	Technique that examines changes inprofits in response to changes in sales volumes, costs, andprices.
______________	2.	Percent by which the selling price (orrevenue) per unit exceeds the variable cost per unit, orcontribution margin as a percent of revenue.
______________	3.	Diagram of the relationship betweentotal revenues and total costs; illustrates how an organizationâsprofits are expected to change under different volumes ofactivity.
______________	4.	Index of the extent to which the costfunction is made up of fixed costs.
______________	5.	Total revenue minus total variable costs.
______________	6.	Proportion of different products or services that anorganization sells.
______________	7.	Excess of an organizationâs expectedfuture sales (in either revenue or units) above the breakevenpoint.
______________	8.	The level of activity where equal costor profit occurs across multiple alternatives.
______________	9.	Selling price per unit minus variablecost per unit.
______________ 10.		Level of operating activity at whichrevenues cover all fixed and variable costs and there is noprofit.
______________ 11.		Margin of safety as a percentage ofactual or estimated sales (units or revenues).
______________ 12.		A systematic tendency for people to beoverly optimistic about the outcomes of their plans andprojects.

lavendermanatee604

ACTG 1P12 Lecture Notes - Lecture 13: Contribution Margin, Fixed Cost, Earnings Before Interest And Taxes

Document Summary

Get access

Related Documents

COMM 305 Chapter Notes - Chapter 6: Contribution Margin, Fixed Cost, Earnings Before Interest And Taxes

COMM 305 Lecture 1: comm 305 note

COMMERCE 2AB3 Chapter 6: Chapter 6 Wiley

Related Questions