exam 1 Flashcards

1
Q

Direct costs

A

Costs connected to a specific product

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2
Q

Indirect costs

A

Costs involved with maintaining and running a business

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3
Q

Product costs

A

Costs involved in creating a product
Direct Materials, Direct Labor, Manufacturing Overhead

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4
Q

Direct Materials

A

materials used to create a product

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5
Q

Direct Labor

A

labor (people’s times and talent) in creating a product

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6
Q

Manufacturing Overhead

A

Other costs incurred in creating a product that is not direct material or direct labor

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7
Q

Period costs

A

non-product related costs such as sales and marketing

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8
Q

Manufacturing Overhead Costs

A

Indirect materials, Indirect labor, supplies, depreciation on factory equipment, machine maintenance

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9
Q

Cost of Goods Manufactured

A

(Beginning WIP + Total Manufacturing Costs (DM+DL+MOH) - Ending WIP)

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10
Q

Cost of Goods Sold

A

(Beginning Inventory + Purchases - Ending Inventory)

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11
Q

Contribution margin

A

Sales - VC = CM

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12
Q

Breakeven (Units)

A

FC ÷ CM per unit

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13
Q

Breakeven (dollars)

A

FC ÷ CM ratio

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14
Q

operating leverage

A

CM ÷ income

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15
Q

Projected Sales

A

(target profit + fixed costs) ÷ contribution margin per unit

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16
Q

Margin of safety (units)

A

Sales Units - Break-even point units

17
Q

Margin of safety (dollars)

A

Sales (dollars) - Break-even (dollars)

18
Q

Operating income

A

CM - FC

19
Q

Contribution margin ratio (or percentage)

A

Contribution margin per unit ÷ sales price per unit

20
Q

Contribution margin per unit

A

sales price per unit - VC per unit

21
Q

Weighted-average contribution margin

A

CM for each product X percentage of sales they contribute

22
Q

hi low method y = a +bx

A

a = hi cost - (hi quantity x b)
b = (hi cost - low cost) ÷ (hi quantity - low quantity)