ACC 312 Study Guide - Midterm Guide: Dependent And Independent Variables, Contribution Margin, European Cooperation In Science And Technology
Document Summary
Break-even sales dollar = fixed costs/contribution margin ratio: contribution margin ratio = (sales-var)/sales. Prior to beginning cvp analysis, an org"s cost behavior should be analyzed. Sales mix constant: # units produced & sold equal, price of product doesn"t change, total fixed expenses constant. Useful to evaluate company across time periods, not valid btwn comps. Dif btwn budgeted sales rev and break-even sales rev. Average of contribution margin per unit times relative sales proportion. Contribution income statement: statement that discloses costs by category of their behavior. Includes: net income, contribution margin, breakdown of expenses by cost behavior. Account-classification method (account analysis): careful examination of orgs ledger accounts: cost analysis classifies each cost item in ledger as variable, fixed, or semivariable. Engineered cost: bears definitive physical relationship to activity measure. In merchandising firms, most labor costs are fixed or step-fixed. Cost estimation is the analysis of historical data concerning costs & activity levels.