Cost Behavior
Costs incurred for each unit
What are variable costs?
Revenue minus variable costs
What is contribution margin?
Examining whether to accept or reject a one-time order
What is a special order?
Costs incurred as totals regardless of volume
What are fixed costs?
Changes directly with volume
What do variable costs do?
The cost equation
What is y = V*X + F?
CVP relationships
What are CVP t2-elo.,-fionrh1 rs?
500MH * 10 shirts/MH
What is 5,000 shirts?
Total remains constant
What does total fixed cost do?
Per unit remains constant even with changes in volume
What does Per unit do?
What happens to total costs per unit when volume changes
What is total cost/unit changes?
High fixed assets
What is Fast Food?
Relevant costs in make-or-buy decisions
Listed examples may vary
Total fixed costs
Variable costs per unit
What is $10 per united any volume?
Impact of a special order on regular sales
What is affect regular sales?
Breakeven point formula
(fixed costs)/(unit contribution margin)
Savings from freed capacity
Available space for other use
Impact on fixed cost per unit when volume changes
What is fixed cost changes?
Variable costs example
Examples may vary
Multiproduct CVP analysis
What is weighted average CM?
Target profit with sales revenue
(Fixed Costs + Target Profit)/(Unit Contribution Margin)
Unavoidable costs
What are unavoidable costs?
Costs that are eliminated are also known as
avoidable costs
2,000 MH * 20 jeans/MH
What is 40, 000 jeans?