Review for Midterm

Question 1

Tradiitonal approach

Answer 1

Sales-Cogs= Gross margin

• op ex (v and f)= bottom line

Question 2

MFG cost under vc

Answer 2

dm+dl+ vmoh

Question 3

MFG cost under absorption

Answer 3

DM+DL+VMOH + FMOH

Question 4

How do you reconcile the difference between absorption costing and variable costing

Answer 4

Change in inventory*fmoh

Question 5

CVP analysis- basic equation

Answer 5

revenue-cost=profit

Question 6

CVP graph- semi mixed cost

Answer 6

fixed cost + variable cost line on top

Question 7

how to turn asemi mixed cost graph to a CVP grapph?

Answer 7

add the revenue line

Question 8

Cost going down breakeven going dow = good

cost going up breakeven going up= bad

Question 9

higher the breakeven=lower the margin of safety

Question 10

Scattergraph

Answer 10

x axis= activity level

plot all the points of data

and then you get to solve for b to get the variable cost

Question 11

Highest lowest method

Answer 11

YOURE LOOKING ATA CTIVITY LEVELS NOT COST

Question 12

Least squared regression

Answer 12

best fit line, sum of squared difference minimized

Question 13

OVER applied MOH

Answer 13

decrease COGS cuz you overapplied MOH

Question 14

UNDER applied MOH

Answer 14

Increase COGS cuz you overapplied MOH