WGU C213 Accounting Topic 11
Visual-fit
A method of segregating the fixed and variable components of a mixed cost by
plotting on total costs at several activity levels and drawing a regression line
through the points
Break-even Point
The amount of sales at which total costs of the number of units sold equal total
revenues; the point at which there is no profit or loss
Contribution Margin
The difference between total sales and variable costs; the portion of sales
revenue available to cover fixed costs and provide a profit
Contribution Margin Ratio
The percentage of net sales revenue left after variable costs are deducted; the
contribution margin divided by net sales revenue.
Cost Behavior
The way a cost is affected by changes in activity levels
Cost-volume-profit (C-V-P) Analysis
Techniques for determining how changes in revenues, costs, and level of activity
affect the profitability of an organization.
Fixed Costs
Costs that remain constant in total, regardless of activity level, at least over a
certain range of activity
High-low Method
Visual-fit
A method of segregating the fixed and variable components of a mixed cost by
plotting on total costs at several activity levels and drawing a regression line
through the points
Break-even Point
The amount of sales at which total costs of the number of units sold equal total
revenues; the point at which there is no profit or loss
Contribution Margin
The difference between total sales and variable costs; the portion of sales
revenue available to cover fixed costs and provide a profit
Contribution Margin Ratio
The percentage of net sales revenue left after variable costs are deducted; the
contribution margin divided by net sales revenue.
Cost Behavior
The way a cost is affected by changes in activity levels
Cost-volume-profit (C-V-P) Analysis
Techniques for determining how changes in revenues, costs, and level of activity
affect the profitability of an organization.
Fixed Costs
Costs that remain constant in total, regardless of activity level, at least over a
certain range of activity
High-low Method
