Exam 2 Flashcards
How to find the contribution margin?
Sales revenue - variable expense
Total cost doesn’t change with changes in volume of activity (within the relevant range). the cost per unit will change as volume (number of units) change. the total may be different than expected, however this will not be due to changes in the volume of units made or sold.
Fixed cost
cost that will always be fixed?
rent, salaries, property tax
changes in total in direct proportion to changes in the level of activity. the total cost increases/decreases as units made increases or decreases
variable cost
items that will always be variable cost?
DM, DL, Vmoh, sales commision, shipping
it is a ___ cost if it cost you more if you make or sell more?
variable
if you sell more it cost you more?
variable cost
if you pay a set amount regardless of volume
fixed cost
MOH is almost always __ besides __
fixed, utilities
cost that are paid monthly/anually. anytime you see “worker or inspector”. remains constant in total
fixed cost
__ cost per unit will remain constant
variable cost
total __ cost will change with changes in activity but cost per unit doesnt change
varibale
As volume increases __ cost will stay the same, and __ cost per unit will stay the same
fixed; variable
Break even point in sales units?
Total fixed cost/(price per unit - variable cost per unit)
break even point in sales dollars?
price per unit X break even sales units