Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
7 Cards in this Set
- Front
- Back
|
Variable Costs |
Remain the same per unit at every level Vary in total directly and proportionately with changes in the activity level curvilinear relationship |
|
|
Fixed Costs |
Costs the remain the same in total regardless of changes in the activity level Cost per unit varies inversely with activity: as volume increases, unit cost declines, ect. nonlinear relationship |
|
|
Relevant Range |
Range of activity over which a company expects to operate during a year. |
|
|
Mixed Costs |
Change in total but not proportionately with changes in the activity level. ex: utilities |
|
|
Basic Components of CVP Analysis |
Volume or level of activity Unit selling prices Variable costs per unit Total fixed costs Sales Mix |
|
|
Importance of CVP Analysis |
Profit planning Setting selling prices Determining product mix Maximizing use of production facilities |
|
|
Contribution Margin Definition |
Revenue remaining after deducting variable costs Can be expressed as per unit or as a ratio |
