9/30 Class Test

Question 1

cost driver formula

Answer 1

y= fixed costs + variable costs

Question 2

x-axis

Answer 2

activity or dependent variable

Question 3

y-axis

Answer 3

cost

Question 4

income statements traditional

Answer 4

sales

GM

NI

Question 5

contribution margin income statements

Answer 5

sales

CM

NI

Question 6

breakeven point

Answer 6

where the net income is 0

Question 7

margin of safety

Answer 7

area where we have covered our costs and we are making profit

Question 8

sales equation

Answer 8

VC + FC + Profit

Question 9

profits

Answer 9

sales - VC - FC

Question 10

operating income equation

Answer 10

net income/(1-tax rate)

Question 11

margin of safety

Answer 11

total sales - break even sales

Question 12

degree of operating leverage

Answer 12

CM/Net Operating Income

this tells us that by whatever percentage our sales increase our income will increase by x times that (x = degree of OL)

Question 13

steps for high low method

Answer 13

high cost - low cost/high activity - low activity

Question 14

exam

Answer 14

30% short answer
30% multiple choice
40% long answer/problems