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25 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Direct materials and direct labor are generally classified as a (fixed or variable) cost |
Variable |
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The activity that is thought to cause a cost to be incurred is referred to as the |
Activity Base |
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The wages of a production worker is an example of a (fixed or variable) cost. |
Variable |
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The rental cost of a piece of office equipment at $10,000 per month plus $6.23 for each machine hour used over 1,720 hours is an example of a(n) _________ cost. |
Mixed |
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In the high-low method, the difference in total cost divided by the difference in production results is |
Variable Cost per Unit |
4 words |
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Increases in unit variable cost will cause the break-even point to |
Increase |
Stays the same |
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Decreases in property tax expense will cause the break-even point to |
Decrease |
Stays the same |
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Sales less variable costs divided by sales is the calculation of the |
Contribution Margin Ratio |
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Decreases in the unit selling price will cause the break-even point to |
Increase |
Opposite |
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The vertical axis of a break-even chart depicts |
Sales and costs |
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With the aid of computer software, managers can vary assumed styling prices, costs, and volume and can immediately see the effects on the break-even point. Such an analysis is called |
What if |
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The sales volume necessary to break-even or to earn a target profit for a business selling two or me products depends upon the |
Sales Mix |
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Contribution Margin divided by operating income is used in the calculation of |
Leverage |
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The difference between the current sales revenue and the break-even point is referred to as |
Margin of Safety |
3 words |
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An important assumption of cost-volume-profit analysis is that total sales and total costs can be represented by |
Straight Line |
Keep kids in a _________ _________ 2 words |
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A firm has $500,000 of fixed costs, a unit selling price of $12, and variable costs of $8. |
$125,000 |
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The break-even point, in units, is |
$140,000 |
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The contribution margin ratio is |
33% |
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A firm has $625,000 in fixed costs, a unit selling price of $8, and variable costs of $6. The number of sales, in units, necessary to earn a target profit of $125,000 is |
$375,000 |
Add 625,000 and 125,000= Divide ☝and 2 |
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If Pennan Co has an operating leverage of 3 and sales increase from $500,00 to $550,000, the percentage increase expected in operating profit is |
30% |
3 × 500,000= Divide ☝ 500,000 |
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If sales are $800,000, the unit selling price is $20, unit variable cost is $16, and sales at the break-even point are $400,000, the contribution margin is |
20% |
Sales divided by break-even point |
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The data for the highest and lowest levels of a firm's production as follows Units Total Highest 14,000. $66,000 Lowest. 2,000. $18,000 The variable cost per unit is |
$4.00 |
Add them both and then divide total costs from units |
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The estimated total cost to produce 6,000 units is |
$34,000 |
6,000 ×$4= _______ + 10,000 |
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A firm manufactures two products, X and Y. The fixed costs are $13,000 and the sales mix is 75% X and 25% Y. The unit selling price and the unit variable cost for each product are as follows: Selling Price. Variable X. $20. $8 Y. 60. 44 The break-even sales (units) of X and Y is |
1,000 |
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The number of units of Y that would be sold at the break-even point is |
250 |
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