Formulas
Contribution Margin.
What is Sales Revenue - Variable Costs?
This cost contains both fixed and variable cost components.
What is mixed cost?
This is the operating income when a company is operating at its breakeven point.
What is $0?
This type of cost is never relevant.
What are sunk costs?
This method of analysis is more accurate than the high-low method, and is used to identify relationships between variables.
What is regression analysis?
Contribution Margin Ratio.
What is Contribution Margin/Sales Revenue?
Or
What is Contribution Margin Per Unit/Sales Price?
This cost remains constant across different levels of production.
What is fixed cost?
This is the result when you subtract fixed expenses from the contribution margin.
What is operating income?
Managers should try and sell the most of the products with the highest:
What is Contribution Margin?
This is the mathematical formula for mixed costs.
What is y=vx+f?
Target Profit Analysis in units.
What is (Fixed Expenses - Target Income)/Contribution Margin Per Unit?
This cost per unit remains constant across different levels of production.
This is the excess of expected sales over breakeven.
What is margin of safety?
The two requirements for a factor to be relevant.
What is in the future and differs between options?
This type of per-unit cost remains constant at different production volumes.
What is the variable cost per unit?
Target Profit Analysis in sales dollars.
What is (Fixed Expenses - Target Income)/Contribution Margin ratio?
These points are considered when using the high-low method. (Be specific)
What are the highest and lowest volume points?
This is the operating income of a company with sales volume of 1 more than the breakeven point.
What is contribution margin per unit?
There are 3 factors for accepting a special order. They are: is it profitable, will it affect our brand/image, and?
Do we have the capacity?
This type of total cost remains constant at different production volumes.
What are total fixed costs?
Operating Leverage Factor.
What is Contribution Margin/Operating Income
These types of cost(s) have their per-unit cost decrease over higher levels of production.
What is fixed cost and mixed cost?
This will be high if the company has high fixed costs in comparison with relatively lower variable costs.
What is operating leverage?
These costs that are related to the product line are irrelevant to the decision to discontinue a product line.
What are unavoidable fixed costs?
This is the category of cost that is excluded from variable costing but is included in absorption costing.
What is fixed manufacturing overhead?