ACCT 526 Final ULL Managerial Accounting Break Even
Point Contribution Margin CVP Analysis Cost Behavior
Fixed vs Variable Costs Operating Leverage Margin of
Safety Sales Mix Budgeting Decision Making Make or Buy
Keep or Drop Differential Cost Constraints Joint Products
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with Complete A+ Graded Rationales Latest Updated 2026
the point at which total revenue equals total cost (both fixed and variable cost). At breakeven,
profit is zero.
break even point
Alpha Company is evaluating a make-or-buy decision. Which of the following is an example of
an irrelevant cost with regard to a make-or-buy decision?
cost of security guard who will guard the finished goods inventory
fixed expenses that cannot be traced to individual segments or products. They will continue to
exist even if one segment or product is eliminated.
common fixed expense
,the difference between total sales and total variable costs on a total basis, or price minus unit
variable cost on a per-unit basis. Total contribution margin is the amount left over from sales to
contribute to covering fixed costs and profit.
contribution margin
the cost behavior-based income statement. Costs are separated into fixed and variable
categories. First, total variable cost is subtracted from sales to get the contribution margin.
Next, total fixed expenses are subtracted to get operating income (profit).
contribution margin income statement
the ratio of total contribution margin to sales or of unit contribution to price. Contribution
margin ratio is also computed as 1 (100%) minus the variable cost ratio. It represents the
percentage of each sales dollar available to contribute to fixed cost and profit.
contribution margin ratio
the company's relative mix of fixed to variable costs. It is useful in determining operating
leverage.
cost structure
estimates how changes in costs (both variable and fixed), sales volume, and price affect profit.
cost volume profit analysis (CVP)
, a graph showing the relationships among cost, volume (units sold), and profit using a total cost
line and a total revenue line. The intersection of the total cost line with the total revenue line is
the break-even point.
CVP graph
shows the degree to which fixed costs are used to obtain a higher percent change in profits as
sales change. DOL is equal to the total contribution margin divided by operating income.
degree of operating leverage
fixed expenses that can be traced to an individual segment or product. If that segment or
product is eliminated, the direct fixed expense is eliminated.
direct fixed expenses
the number of units sold or the amount of sales revenue earned above the break-even point.
margin of safety
occurs when fixed costs are used to obtain higher change in profits as sales change.
operating leverage
the relative combination of products sold by a company. Sales mix is usually expressed in the
lowest whole units. For example, a sales mix of 3:2 means that for every 3 units of Product A
sold, 2 units of Product B are sold.
sales mix
Point Contribution Margin CVP Analysis Cost Behavior
Fixed vs Variable Costs Operating Leverage Margin of
Safety Sales Mix Budgeting Decision Making Make or Buy
Keep or Drop Differential Cost Constraints Joint Products
Financial Planning Exam Questions Verified and Provided
with Complete A+ Graded Rationales Latest Updated 2026
the point at which total revenue equals total cost (both fixed and variable cost). At breakeven,
profit is zero.
break even point
Alpha Company is evaluating a make-or-buy decision. Which of the following is an example of
an irrelevant cost with regard to a make-or-buy decision?
cost of security guard who will guard the finished goods inventory
fixed expenses that cannot be traced to individual segments or products. They will continue to
exist even if one segment or product is eliminated.
common fixed expense
,the difference between total sales and total variable costs on a total basis, or price minus unit
variable cost on a per-unit basis. Total contribution margin is the amount left over from sales to
contribute to covering fixed costs and profit.
contribution margin
the cost behavior-based income statement. Costs are separated into fixed and variable
categories. First, total variable cost is subtracted from sales to get the contribution margin.
Next, total fixed expenses are subtracted to get operating income (profit).
contribution margin income statement
the ratio of total contribution margin to sales or of unit contribution to price. Contribution
margin ratio is also computed as 1 (100%) minus the variable cost ratio. It represents the
percentage of each sales dollar available to contribute to fixed cost and profit.
contribution margin ratio
the company's relative mix of fixed to variable costs. It is useful in determining operating
leverage.
cost structure
estimates how changes in costs (both variable and fixed), sales volume, and price affect profit.
cost volume profit analysis (CVP)
, a graph showing the relationships among cost, volume (units sold), and profit using a total cost
line and a total revenue line. The intersection of the total cost line with the total revenue line is
the break-even point.
CVP graph
shows the degree to which fixed costs are used to obtain a higher percent change in profits as
sales change. DOL is equal to the total contribution margin divided by operating income.
degree of operating leverage
fixed expenses that can be traced to an individual segment or product. If that segment or
product is eliminated, the direct fixed expense is eliminated.
direct fixed expenses
the number of units sold or the amount of sales revenue earned above the break-even point.
margin of safety
occurs when fixed costs are used to obtain higher change in profits as sales change.
operating leverage
the relative combination of products sold by a company. Sales mix is usually expressed in the
lowest whole units. For example, a sales mix of 3:2 means that for every 3 units of Product A
sold, 2 units of Product B are sold.
sales mix
