ACCT 212 Exam 2 with answers
Absorption |Costing |- |verified |answersA |costing |method |that |includes |all |manufacturing |costs—direct |
materials, |direct |labor, |and |both |variable |and |fixed |manufacturing |overhead—in |unit |product |costs.
Variable |Costing |- |verified |answersA |costing |method |that |includes |only |variable |manufacturing |costs—
direct |materials, |direct |labor, |and |variable |manufacturing |overhead—in |unit |product |costs.
variable |costs |- |verified |answerscosts |that |vary |directly |with |the |level |of |production
fixed |costs |- |verified |answerscosts |that |remain |constant |as |output |changes
Calculate |margin |of |safety |- |verified |answersuse |formula |: |(Expected |sales |- |break |even |sales) |÷ |
(expected |sales)
Process |Costing |- |verified |answersA |costing |method |used |when |essentially |homogeneous |products |are
|produced |on |a |continuous |basis
Break |Even |- |verified |answersFixed |costs |/ |contribution |per |unit
contribution |margin |per |unit |- |verified |answersSelling |price |- |variable |cost |per |unit
Break |Even |Per |Unit |- |verified |answersTotal |Fixed |Cost |/ |CM |Per |Unit
pre-tax |income |- |verified |answersafter |tax |income |/ |(1 |- |tax |rate)
break-even |point |formula |- |verified |answersFixed |Costs |÷ |(Price |- |Variable |Costs)
Contribution |Margin |Income |Statement |- |verified |answersthe |income |statement |that |groups |cost |by |
behavior |- |variable |or |fixed |- |and |highlights |the |contribution |margin
Degree |of |Operating |Leverage |- |verified |answersFormula: |Contribution |Margin |/ |Net |Operating |
Income
The |DOL |is |a |measure |that |reflects |the |change |in |a |company's |operating |income |after |a |percentage |
change |in |its |sales.
The |DOL |reflects |the |operating |risk |a |company |faces |as |a |result |of |the |structure |of |its |fixed |and |
variable |costs.
A |high |degree |of |operating |leverage |indicates |that |a |company |is |likely |to |experience |volatility |in |its |
earnings |with |a |change |in |its |sales |because |it |has |a |large |proportion |of |fixed |costs |in |its |total |costs.
A |low |degree |of |operating |leverage |implies |that |a |company |has |a |high |proportion |of |variable |costs, |
and |the |company |does |not |have |to |dramatically |increase |sales |to |cover |its |fixed |costs.
Absorption |Costing |- |verified |answersA |costing |method |that |includes |all |manufacturing |costs—direct |
materials, |direct |labor, |and |both |variable |and |fixed |manufacturing |overhead—in |unit |product |costs.
Variable |Costing |- |verified |answersA |costing |method |that |includes |only |variable |manufacturing |costs—
direct |materials, |direct |labor, |and |variable |manufacturing |overhead—in |unit |product |costs.
variable |costs |- |verified |answerscosts |that |vary |directly |with |the |level |of |production
fixed |costs |- |verified |answerscosts |that |remain |constant |as |output |changes
Calculate |margin |of |safety |- |verified |answersuse |formula |: |(Expected |sales |- |break |even |sales) |÷ |
(expected |sales)
Process |Costing |- |verified |answersA |costing |method |used |when |essentially |homogeneous |products |are
|produced |on |a |continuous |basis
Break |Even |- |verified |answersFixed |costs |/ |contribution |per |unit
contribution |margin |per |unit |- |verified |answersSelling |price |- |variable |cost |per |unit
Break |Even |Per |Unit |- |verified |answersTotal |Fixed |Cost |/ |CM |Per |Unit
pre-tax |income |- |verified |answersafter |tax |income |/ |(1 |- |tax |rate)
break-even |point |formula |- |verified |answersFixed |Costs |÷ |(Price |- |Variable |Costs)
Contribution |Margin |Income |Statement |- |verified |answersthe |income |statement |that |groups |cost |by |
behavior |- |variable |or |fixed |- |and |highlights |the |contribution |margin
Degree |of |Operating |Leverage |- |verified |answersFormula: |Contribution |Margin |/ |Net |Operating |
Income
The |DOL |is |a |measure |that |reflects |the |change |in |a |company's |operating |income |after |a |percentage |
change |in |its |sales.
The |DOL |reflects |the |operating |risk |a |company |faces |as |a |result |of |the |structure |of |its |fixed |and |
variable |costs.
A |high |degree |of |operating |leverage |indicates |that |a |company |is |likely |to |experience |volatility |in |its |
earnings |with |a |change |in |its |sales |because |it |has |a |large |proportion |of |fixed |costs |in |its |total |costs.
A |low |degree |of |operating |leverage |implies |that |a |company |has |a |high |proportion |of |variable |costs, |
and |the |company |does |not |have |to |dramatically |increase |sales |to |cover |its |fixed |costs.
