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18 Cards in this Set
- Front
- Back
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Job-Cost Sheet Includes?
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1. Cost of Direct Materials
2. Direct Labor 3. Manufacturing Overhead |
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Inventory Accounts for Manufacturing
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Raw Materials
Work In-Progress Finished Goods |
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Method of applying overhead to products using a number of different allocation bases...
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Activity Based Costing (ABC)
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Step Costs
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Costs that are fixed for a range of values, but increase to a higher level when the upper bound is exceeded.
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Account Analysis
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Requires professional judgment to classify as either fixed or variable.
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Scattergraph
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Plot of data and its relation between production cost and activity. Look at deviation between data points examine linear costs.
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High-Low Method
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Fits straight line between highest and lowest points of data - and measures the slope of the line to measure variable costs. The intercept - where the line meets the cost axis - is the total fixed cost.
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Calculating Break-Even Point (BEP)
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-Set profit equation to 0.
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Margin of Safety
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Difference between expected sales and break-even sales. To see what level of flexibility management has to make changes without risking a net loss.
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Contribution Margin per Unit
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The difference between the selling price and variable cost per unit. Measures the amount each unit sold contributes to covering fixed costs and increasing profit.
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Weighted Average Contribution
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If similar items are sold, can use the contribution margin per unit.
If different items are sold, use contribution margin ratio. |
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Assumptions when conduction CVP analysis
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1. Cost separated into fixed and variable components.
2. Fixed costs remained fixed. 3. Variables costs do not change over activity levels of interest. 4. When conduction CVP, it assumes mix remains constant. 5. Selling price per unit doesn't change. |
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Operating leverage...
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The level of fixed costs vs. variable costs. High fixed is riskier because tend to have large fluctuations in profit when sales fluctuate.
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R Square
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Statistical measure of how well the regression line fits the data. Ranges from low of 0 (no linear relationship) to 1 (perfect linear relationship)
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Intercept of Regression Line
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Estimate of Fixed Cost
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Slope of Regression Line
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Variable Cost per unit
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p-values
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The probability of observing values as large as the estimated coefficients when the true values are 0.
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What does CVP analysis do?
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Explores relationship between costs, volume, and performance.
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