ACCT 2000- Midterm Exam Guide - Comprehensive Notes for the exam ( 103 pages long!)
Document Summary
Prepare a cvp income statement to determine contribution margin. Determine the sales required to earn target net income. How __costs__ respond to changes in _sales volume_, and. The effect of _cost__ and __revenue__ on __profits_. To understand cost-volume-profit (cvp), you must know how costs behave. A knowledge of ___cost behavior_ helps management plan __operations__ and decide between alternative __courses of action__. Cost behavior analysis applies to all types of __entities (corporations, partnerships, sole prop. __. Starting point in cost behavior analysis is measuring key ___business components__. Activity levels may be expressed in terms of: Many companies use more than one measurement base. The activity level selected is called the __activity or volume index__. Identifies the activity that causes changes in the __behavior__ of __costs__. Allows costs to be classified according to their _response__ to changes in activity as either: __variable costs(utility bill)_, ___fixed costs(rent)_, or ___mixed costs(phone bill)___
