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18 Cards in this Set
- Front
- Back
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After-Tax Net Income
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An organizations net income after its income-tax expense is subtracted
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Before-Tax Income
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An organization's income before its income tax expense is subtracted
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break-even point
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The volume of activity at which an organization's revenues and expenses are equal. May be measured either in units or sales dollars
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contribution income statement
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An income statement on which fixed and variable expenses are separated
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contribution-margin ratio
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The unit contribution margin divided by the sales price per unit. Also may be expressed in percentage form; then it is called the contribution-margin percentage.
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cost structure
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the relative proportions of an organization's fixed and variable costs
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cost-volume profit analysis (CVP)
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a study of the relationships between sales volume, expense, revenue, and profit
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cost-volume profit graph (CVP)
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a graphical expression of the relationships between sales volume, expenses, revenue, and profit
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operating leverage
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the extent to which an organization uses fixed costs in its cost structure. The greater the proportion of fixed costs, the greater the operating leverage.
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Operating leverage factor
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a measure of operating leverage at aparticular sales volume. computed by dividing an organization's total contribution margin by its net income
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profit-volume graph
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a graphical expression of the relationship between profit and sales volume
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safety margin
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Difference betweeen budgeted sales revenue and break-even sales revenue
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sales mix
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relative proportion of sales of each of an organization's multiple products
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sensitivity analysis
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a teechnique fordetermining what would happen in a decision analysis if a key prediction or assumption proves to be wrong
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target net profit (or net income)
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The profit level set as management's objective
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total contribution margin
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the sales revenue less total variable expenses
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unit contribution margin
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sales price minus the unit variable cost
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weighted-average unit contribution margin
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average of a firm's several products' unit contribution margins, weighted by the relative sales proportion of each product
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