The Profit Equation is: Revenues – Expenses = Profit R(u)-V(u)-F= Profit Revenue-Variable Costs-Fixed Costs=Profit All of the above

Classified in Economy

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variable cost: production increases, total cost increases, per unit stays the same (direct mat, labor, electricity exp, supplies). 

fixed costs: costs that remain the same as activity base changes. Inverse relationship with production and per unit cost (depre, taxes, superv salaeries, insurance)

mixed: (control and purch dept salaries, maintanance and warehouse exp)

high low method: V costs per unit= difference in total costs/ difference in units produced

fixed costs: (choose one) total costs - (Vcosts per units * units produced)

Contribution margin is the excess of sales over variable costs.

The break-even point is the level of operations at which a company’s revenues and expenses are equal

The break-even sales in units= fixed costs / unit contribution margin

Unit contribution margin = unit selling price - unit variable costs

A variation of fiscal-year budgeting, called continuous budgeting, maintains a  projection into the future.

A static budget shows the expected results of a responsibility center for only one activity level.Flexible budgets show the expected results of a responsibility center for several activity levels.

Master budget: The comprehensive budget plan linking all the individual budgets related to sales, cost of goods sold, operating expenses, projects, capital expenditures, and cash. Is an integrated set of operating, investing, and financing budgets for a period of time. Based on the budgeted income statement and budgeted balance sheet.

The sales budget begins by estimating the quantity of sales.

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