ACC 241 exam 2(100% Accurate)

ACC 241 exam 2(100% Accurate)
variable costs - ANSWERSchange in total in direct proportion to changes in volume

mixed costs per unit decrease as decrease as volume increases but - ANSWERSnot in
direct proportion to chances in volume
- because mixed costs contain both fixed cost and variable cost components, they
behave differently

contribution margin ratio - ANSWERScontribution margin / sales revenue


operating leverage - ANSWERStells how responsive a company's operating income is
to changes in volume
- greater the operating leverage factor, the greater the impact of change in sales
volume has on operating income
*true for both increases and decreases in volume

indifeference point - ANSWERStotal revenues = total expenses

operating leverage factor = - ANSWERScontribution margin / operating income

margin of safety in units = - ANSWERSexpected sales in units - breakeven sales in
units

margin of safety in dollars = - ANSWERSexpected sales in dollars - breakeven sales in
dollars

margin of safety as a percentage = - ANSWERSmargin of safety in units / expected
sales in units variable costing - ANSWERSonly variable manufacturing costs are treated
as inventoriable product costs

profit = - ANSWERScontribution margin - fixed costs

contribution margin ratio x sales revenue = - ANSWERScontribution margin

breakeven amount in dollars = - ANSWERSfixed costs + target profit / contribution
margin ratio mixed cost keys - ANSWERS- total mixed costs increase as volume
increases because of the variable cost component
- mixed costs per unit decrease decrease as volume increases because of the fixed
cost component`

total mixed cost equation y = - ANSWERStotal mixed costs = variable cost component +
fixed cost component