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19 Cards in this Set
- Front
- Back
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cost driver
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any output measure that causes cost
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variable cost
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changes in direct proportion to changes in cost-driver level. e.g. 10% increase in units of production would produce 10% increase in variable cost.
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fixed cost
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not afected by changes in cost-driver level
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CVP
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cost-volume-profit analysis
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break-even point
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level of sales at which revenue equals expenses and net income is zero
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marginal income/ unit contribution margin
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unit sales price minus variable cost per unit
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total contribution margin
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total number of units sold x unit contribution margin
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variable-cost %
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total variable cost/total sales
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contribution-margin %
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total contr. margin/total sales=100% - variable cost %
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incremental effect
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change in total results under new condition
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operating leverage
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ratio of fixed to variable costs
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margin of safety
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shows how far sales can fall below planned level before losses occur. planned saled- break-even unit sales
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gross margin/ gross profit
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excess of sales over COGS. sales price-COGS
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line of credit
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informal agreement with a bank where bank agrees to lend firm up to predetermined amount
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net cash outflow
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disbursements greater than receipts
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inventory equation
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beginning balance + additions (labor, purchases, depreciation) - COGS
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taxes payable equation
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beginning balance + taxes - tax payments per the cash budget
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retained earnings equation
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beg. balance + net income - dividends
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cash flow from working capital equation
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change in current liabilities - change in current assets
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