10/7 Class Flashcards
we talked about
the high low method, and regression analysis,
high low method
fixed costs are the intercept, break even is the place the two lines intercept
Income statements
traditional Sales -COGS GM -SGA NI CM Sales -VC CM -FC NI
fixed costs graph
flat for total
regressing for unit costs
absorption costing
we place the fixed costs under COGS
Variable costign
we place the fixed costs to MOH
producing for inventory
overproducing to bring down our net income in variable costing
factors that influence demand
price consumer income quality goods availability of substitutes demand for complementary goods necessity or luxary
price elasticity of demand
%change in quantity/%change in price
if demand is relatively elastic, a small percent change in price will lead to a greater percent change in quantity demanded
perfect competition
many buyers and sellers, no one of which is large enough to influence the market
monopolistic competition
has both the characteristics of both monopoly and perfect competition
oligopoly
few sellers
monopoly
barriers to entry are so high that there is only one firm in the market
cost based pricing
prices are established using cost plus markup
target pricing
prices are influenced by the market conditions
