BSNS107

Card Set Information

Author:
rosme090
ID:
89595
Filename:
BSNS107
Updated:
2011-06-07 05:24:25
Tags:
Week
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Description:
Cost Concepts, High Low Method, CM and BE
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  1. Management Accounting:
    Supports the internal planning decisions made by management.
  2. Financial Accounting:
    Has more of a scorekeeping, historical orientation that provides information to owners and others outside the organisation.
  3. Typical Variable Costs:
    • Raw Materials
    • Direct Labour
    • Factory water, power, light
    • Delivery Costs
  4. Typical Fixed Costs:
    • Land Tax
    • Insurance
    • Depretiation
    • Advertising
  5. Total Cost Formula:
    Total Cost = Fixed Cost + Variable Cost
  6. High/ Low Method:
    • Highest Cost - Lowest Cost
    • Hightest Units - Lowest Units
  7. Cost formula

    Y = a + bx

    What does it mean?
    TC = Fixed Cost + (Variable Cost x Units)
  8. What is the Contribution Margin Format?
    • Sales
    • - VC
    • =CM
    • - FC
    • =Profit/ Loss
  9. What is the Contribution Margin Ratio?
    • CM
    • Sales
  10. Break-Even is when:
    Revenue = Expenses
  11. Break-Even point in units:
    • FC
    • CM/ Unit
  12. Break-Even point in dollars:
    • FC
    • CM%

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