C3_post - Review 1. Chapter 1 emphasized costs that are...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Review Review 1. 1. Chapter 1 emphasized  Chapter 1 emphasized  costs that are part of  costs that are part of  inventory inventory  (product costs) vs.   (product costs) vs.  costs that are  costs that are  not part of your product not part of your product  (period costs).  (period costs). 1. 1. Chapter 2 emphasized  Chapter 2 emphasized  cost behavior cost behavior     (predicting how costs will change). (predicting how costs will change).
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
$- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 0.0 5.0 10.0 15.0 20.0 25.0 30.0 total miles (000s) total cost Chapter 2…
Background image of page 2
Activity Total Cost X Y just like high school algebra y = mx + b Fixed Costs = the intercept . Variable Costs = the slope
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Cost Behavior: Chp. 2 Units Sold Total Cost
Background image of page 4
Chp 3: Cost-Volume-Profit Graph Units Sold Dollars Profit area Loss area Revenue Line
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Cost-Volume-Profit Graph Units Sold Dollars Profit area Loss area “Break-even” Point
Background image of page 6
Determining the Break-even Point The break-even point is the point where  total revenue equals total costs total revenue equals total costs  (both  variable and fixed).  The textbook starts with this formula: Break-even Break-even volume in units volume in units = = Fixed costs Fixed costs Contribution margin per unit Contribution margin per unit
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Reaching a Target Profit Level The formula is easily extended…instead of earning “zero  profit” (i.e., breakeven), many companies have a profit  goal in mind… Break-even Break-even volume in units volume in units = = Fixed costs +  Fixed costs +  Desired profit Desired profit     Contribution margin per unit Contribution margin per unit
Background image of page 8
Reading the Graph Units Sold Dollars Profit area Loss area
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 33

C3_post - Review 1. Chapter 1 emphasized costs that are...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online