10/7 Class Flashcards

1
Q

we talked about

A

the high low method, and regression analysis,

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2
Q

high low method

A

fixed costs are the intercept, break even is the place the two lines intercept

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3
Q

Income statements

A
traditional
Sales
-COGS
GM
-SGA
NI
CM
Sales
-VC
CM
-FC
NI
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4
Q

fixed costs graph

A

flat for total

regressing for unit costs

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5
Q

absorption costing

A

we place the fixed costs under COGS

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6
Q

Variable costign

A

we place the fixed costs to MOH

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7
Q

producing for inventory

A

overproducing to bring down our net income in variable costing

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8
Q

factors that influence demand

A
price 
consumer income
quality goods
availability of substitutes
demand for complementary goods
necessity or luxary
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9
Q

price elasticity of demand

A

%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

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10
Q

perfect competition

A

many buyers and sellers, no one of which is large enough to influence the market

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11
Q

monopolistic competition

A

has both the characteristics of both monopoly and perfect competition

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12
Q

oligopoly

A

few sellers

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13
Q

monopoly

A

barriers to entry are so high that there is only one firm in the market

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14
Q

cost based pricing

A

prices are established using cost plus markup

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15
Q

target pricing

A

prices are influenced by the market conditions

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16
Q

markup on COGS

A

(selling and administrative expenses + operating income)/COGS

17
Q

penetration pricing

A

pricing of a new product at a low initial price to build market share quickly

18
Q

price skimming

A

a higher price is charged when a product or service is first introduced

19
Q

predatory pricing

A

practice of setting prices below cost for the purpose of injuring competitors and eliminating competition, known as dumping on the international market

20
Q

price discrimination

A

charging different prices to different customers

it is illegal unless there is a competitive agreement

21
Q

price gouging

A

when firms with market power price products too high, if they know it will be essential

22
Q

profit

A

measure of the difference between what a firm puts into making and selling a product or service and what it receives

23
Q

profits are measured to

A

Determine the viability of the firm
Measure managerial performance
Determine whether or not a firm adheres to government regulations
Signal the market about the opportunities of market share

24
Q

absorption costing

A

includes FMOH as product costs

25
Q

variable costing

A

includes FMOH as a period costs

26
Q

Production > Sales

A

Absorption costing income > variable costing income

Inventory increases

27
Q

production < sales

A

Absorption costing income < variable costing income

inventory decreases

28
Q

production = sales

A

Absorption costing income = variable costing income

inventory stays the same