Module 4 Flashcards
What is intercept value on the regression output.
Y is a value when X is zero.
Regression analysis
seperates costs in to fixed and variable components
Absorption Approach equation
revenues less COGS = Gross Margin Less Operating Expenses = Net income
Contribution Approach Equation
revenue less variable costs = contribution margin less fixed costs = net income
Contribution margin ratio
contribution margin/revenue
Treatment of Fixed MOH with Absorption vs Variable Costing
Included in product cost with absorption and excluded from product cost with variable
Breakeven points in units
total fixed costs/contribution margin per unit
Breakeven point in dollars 1) Contribution margin per unit
unit price x breakeven points in units
Breakeven point in dollars 2)Contribution Margin ratio
Total fixed costs/contribution margin ratio
Margin of safety
excess sales over breakeven sales, expressed in dollar or as a %.
Margin of safety (in dollars)
Total sales (in dollars) - Breakeven sales (in dollars)
Margin of safety percentage
Margin of safety in dollars/ Total Sales
Coefficient of correlation (r)
measures strength of linear relationship between the dependent variable and independent variable. between -1 and 1
Coefficient of Determination (r squared)
proportion of dependent variable explained by the independent variable. Value between 0 and 1
What happens to ratio when numerator increases
resulting ratio increases