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Key Terms-Chapter 20
Key Terms-Chapter 19
Classification of Costs
Classifying Activities
Formulas
100
Contribution Margin
What is sales minus variable costs
100
An activity within the value chain that makes the product or service more valuable to the customer.
What is value-added activity
100
Fixed, Variable, Semi-Variable or none - Cost of Goods Sold
What is variable
100
Value Added or Non-value added and why- training for line workers on proper operation of equipment
What is value added because of prevention
100
Formula for Contribution Margin Ratio
What is Contribution Margin Per Unit / Unit Sales Price
200
Costs and expenses that remain unchanged despite changes in the level of activity base.
What are fixed costs
200
An activity within the value chain that does not make the product or service more valuable to the customer.
What is non-value added activity
200
Fixed, Variable, Semi-Variable or none -Salaries to sales people (monthly minimum amount plus a commission)
What is semi-variable
200
Value Added or Non-value added and why - Waste disposal costs
What is non-value added
200
Unit Sales Volume needed to break-even
What is Sales Volume (in units) = Fixed Costs/Contribution Margin per unit
300
The level of sales at which a company neither earns an operating profit not incurs a loss. Revenues exactly covers cost and expenses
What is break-even point.
300
An approach to manufacturing that reduces or eliminates non-value added activities, such as maintenance of inventories.
What is Just in Time Manufacturing
300
Fixed, Variable, Semi-Variable or none -Income Tax Expense
What is None
300
Value Added or Non-value added and why - offering customer refunds due to defective products
What is non-value added
300
What is sales volume needed to break-even?
What is Sales Volume (in dollars) = Fixed Costs/Contribution Margin Ratio
400
Costs and expenses that vary directly and proportionally with changes in the level of the activity base.
What are variable costs.
400
The set of activities necessary to create and distribute a desirable product or service to a customer.
What is value chain
400
Fixed, Variable, Semi-Variable or none -Property tax expense
What is fixed
400
Value Added or Non-value added and why - Recording number of defects recorded each month
What is value added - appraisal
400
Sales Volume (in units) for any desired level of operating income?
What is Sales Volume (in units) = Fixed Costs + Target Operating Income / Contribution Margin per unit
500
The excess of unit sales price over variable cost per unit
What is contribution margin per unit
500
The consideration of all potential resources consumed by the product over its entire life.
What is life-cycle costing
500
Fixed, Variable, Semi-Variable or none -Depreciation expense on the sales showroom
What is fixed
500
Value Added or Non-value added and why - Inspection costs incurred by Walmart on merchandise purchased from Mattel, Inc.
What is value added - appraisal costs
500
Manufacturing Efficiency Ratio
What is Manufacturing Efficiency Ratio = Value-Added Time/Cycle Time