Exam 2 Equations

Question 1

common stock - expenses + sales revenue

Answer 1

cash (balance sheet)

Question 2

(product cost / units produced) x units sold

Answer 2

cost of goods sold (COGS)

Question 3

sales - variable expenses

Answer 3

contribution margin (CM)

Question 4

units sold x price per unit sold

Answer 4

sales revenue

Question 5

sales revenue - COGS

Answer 5

gross margin

Question 6

gross margin - SG&A = net income

Answer 6

retained earnings

Question 7

cost per unit produced x (units produced - units sold)

Answer 7

finished goods inventory

Question 8

total product cost / total units produced

Answer 8

cost per unit

Question 9

sales revenue
- COGS
= gross margin
- SG&A
= net income

Answer 9

income statement

Question 10

assets
cash
finished goods inventory
total assets
equity
common stock
retained earnings
total equity

Answer 10

balance sheet

Question 11

sales
- variable expenses
= contribution margin
- fixed expenses
= net operating income

distinguishes between fixed and variable costs

sales and variable expenses can be expressed per unit; fixed expenses are expressed in total

Answer 11

income statement (contribution format)