My Equation Costs More than Yours
Sales Price Per Unit
- Variable Cost Per Unit
What is the Contribution Margin per Unit?
It uses separate predetermined overhead allocation rates for each activity.
What is ABC Costing System?
Requires significant coordination among the company's various business segments
What is the budgeting process?
The difference between actual results and the expected results in the flexible budget for the actual units sold.
What is the flexible budget variance?
Jackson Company manufactures computer keyboards. The budgeted sales price is $97 per keyboard, the variable costs are $40 per keyboard, and budgeted fixed costs are $13,000. What is the budgeted operating income for 2,000 keyboards?
$101,000
Contribution Margin Per Unit / Sales Price Per Unit
What is Contribution Margin Ratio?
Estimated Overhead Costs / Estimated Activity Base
What is the Predetermined Overhead Rate?
These occur when sales are lower or expenses are higher than budgeted.
What are unfavorable variances?
(Actual Price per Unit of Materials - Standard Price per Unit of Materials) x Actual Quantity of Materials Used
What is the direct material price variance?
What is the contribution margin per unit?
Sales Price Per Unit: $145
Variable Cost Per Unit: $35
Fixed Costs: $14,000
$110
Total Fixed Costs / Contribution Margin Per Unit
What is Breakeven Points in Units?
The most suitable base for allocating indirect costs to the finished products of a labor intensive production department.
What are direct labor hours or costs?
This budget is critical to the master budget; it reports projected unit and product sales.
What is the sales budget?
(Actual Quantity of Materials Used for Units Produced - Standard Quantity of Materials Expected for the Units Produced) x Standard Price
What is the Direct Material Quantity Variance?
What is the contribution margin ratio?
Sales Price Per Unit: $145
Variable Cost Per Unit: $35
Fixed Costs: $14,000
75.86%
Fixed Costs / Contribution Margin Ratio
What is Breakeven Point in Dollars?
The reason a cost occurs
What is a cost driver?
These occur when sales are higher or expenses are lower than budgeted.
What are favorable variances?
Variable Overhead Rate Variance + Variable Overhead Efficiency Variance
What is Total Variable Overhead Variance?
Robust Coffee Importers sold 10000 units in October at a sales price of $75 per unit. The variable cost is $40 per unit. The monthly fixed costs are $9000. What is the sales revenue?
750,000
Sales Revenue
- Variable Costs
- Fixed Costs
What is Operating Income?
The cost to prepare a machine to produce different types of units, it is the most suitable base for allocating costs to the finished products.
What is number of machine set ups?
The final step in the master budget.
What is the budgeted balance sheet?
The difference between the expected results in the flexible budget for the actual units sold and the static budget
Robust Coffee Importers sold 10000 units in October at a sales price of $75 per unit. The variable cost is $40 per unit. The monthly fixed costs are $9000. What is the operating income?
(10000*75) Sales Revenue
- (10000*40) Variable Costs
= Contribution Margin
-9000 Fixed Costs
=341,000