Managerial Accounting

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Managerial Accounting
2010-09-29 17:10:51
Chapter Six

Cost-Volume-Profit Relationship
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  1. the level of sales at which profit is zero
    Break-even point
  2. A ratio computed by dividing contribution margin by dollar sales
    Contribution Margin Ratio(CM ratio)
  3. A graphical representation of the relationships between an organization's revenues, costs, and profits on the one hand and its sales volume on the other hand.
    Cost-Volume-Profit (CVP) Graph
  4. A measure, at a given level of sales, of how a percentage change in sales will affect profits. The ______is computed by dividing contribution margin by net operation income.
    Degree of operation leverage
  5. An analytical approach that focuses only on those costs and revenues that change as result of a decision.
    Incremental analysis
  6. The excess of budgeted (or actual) dollar sales over the break-even dollar sales.
    Margin of Safety
  7. A measure of how sensitive net operating income is to a given percentage change in dollar sales.
    Operating Leverage
  8. the relative proportions in which a company's products are sold. ____ is computed by expressing the sales of each product as a percentage of total sales
    Sales mix
  9. Estimating what sales volume is needed to achieve a specific target profit.
    Target profit analysis.
  10. A ratio computed by dividing variable expenses by dollar sales
    Variable expense ratio