BEC

Card Set Information

Author:
Anonymous
ID:
95477
Filename:
BEC
Updated:
2011-07-27 21:01:48
Tags:
BEC
Folders:

Description:
Planning, Control, Analysis
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  1. If the level of ACTIVITY increases within the relevant range:
    • Total cost will increase
    • Fixed unit cost per unit will decrease
    • Variable cost will remain same per unit.
  2. 1)Selling price does not change with activity level,
    2) The sales mix remains constant
    3) Cost can be separated into fixed and variable
    4) Total fixed Cost are constant
    5) Variable Cost per unit are constant
    Assumptions of Cost Volume Profit
  3. Total Revenue = Total Expenses (0)
    Break Even Point

    Fixed Cost/Contribution Margin = BE Units
  4. Contribution Margin
    Sales - Variable Cost = Contribution Margin
  5. BreakEven Point in $$
    Fixed Cost/Contribution Margin Ratio = $$
  6. Operating Leverage
    • % Change in Operating Income/
    • % change in Sales
  7. Prime Cost
    Direct Material + Direct Labor
  8. Conversion Cost
    Direct Labor + Overhead

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