Study your flashcards anywhere!
Download the official Cram app for free >
 Shuffle Toggle OnToggle Off
 Alphabetize Toggle OnToggle Off
 Front First Toggle OnToggle Off
 Both Sides Toggle OnToggle Off
 Read Toggle OnToggle Off
How to study your flashcards.
Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key
Up/Down arrow keys: Flip the card between the front and back.down keyup key
H key: Show hint (3rd side).h key
A key: Read text to speech.a key
18 Cards in this Set
 Front
 Back
JobCost Sheet Includes?

1. Cost of Direct Materials
2. Direct Labor 3. Manufacturing Overhead 

Inventory Accounts for Manufacturing

Raw Materials
Work InProgress Finished Goods 

Method of applying overhead to products using a number of different allocation bases...

Activity Based Costing (ABC)


Step Costs

Costs that are fixed for a range of values, but increase to a higher level when the upper bound is exceeded.


Account Analysis

Requires professional judgment to classify as either fixed or variable.


Scattergraph

Plot of data and its relation between production cost and activity. Look at deviation between data points examine linear costs.


HighLow Method

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.


Calculating BreakEven Point (BEP)

Set profit equation to 0.


Margin of Safety

Difference between expected sales and breakeven sales. To see what level of flexibility management has to make changes without risking a net loss.


Contribution Margin per Unit

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.


Weighted Average Contribution

If similar items are sold, can use the contribution margin per unit.
If different items are sold, use contribution margin ratio. 

Assumptions when conduction CVP analysis

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. 

Operating leverage...

The level of fixed costs vs. variable costs. High fixed is riskier because tend to have large fluctuations in profit when sales fluctuate.


R Square

Statistical measure of how well the regression line fits the data. Ranges from low of 0 (no linear relationship) to 1 (perfect linear relationship)


Intercept of Regression Line

Estimate of Fixed Cost


Slope of Regression Line

Variable Cost per unit


pvalues

The probability of observing values as large as the estimated coefficients when the true values are 0.


What does CVP analysis do?

Explores relationship between costs, volume, and performance.
