Prelim 2 Sheet_StudyGuide

Prelim 2 Sheet_StudyGuide - Contribution Margin=Total...

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Contribution Margin= Total Revenues-Total VC CM Per Unit= Selling Price- VC /Unit CM%= CM per Unit/Selling Price. Gross Margin= Revenues-COGS Operating Leverage= Contribution Margin/ Operating Income—Effect of FC on changes in OI as Q changes. Normal/Standard Costing- Budgeted costs for all (DM,DL,OH) Overhead Assignment-Traditional- Allocate O/H on volume-based cost driver(DLS,DLH), Higher O/H and Lower DL, Some Costs aren’t Volume-Related Activity Based- Multiple Cost Drivers,Resource Consumption,Activities. Cost Allocation Base- factor that links in a systematic way an indirect cost or group of indirect costs to a cost object i.e.-Allocate costs on basis of machine hours used to produce different products Indirect Cost Rate= Total Indirect Cost/Budgeted Qty of Cost Allocation. Base Time Period Used to Compute Indirect Cost Rates: Numerator Reason-( Indirect Cost Pool)-The shorter the period, the greater the influence of seasonal patterns on the amount of costs. Denominator Reason- (Quantity of Allocation Base)-Long periods needed to spread monthly fixed indir costs over fluctuating levels of monthly output Cost Hierarchies - Unit Level -Performed for each unit of output. Batch Level- Each time a batch is produced. Product
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This test prep was uploaded on 02/19/2009 for the course H ADM 221 taught by Professor Gpotter during the Fall '05 term at Cornell.

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Prelim 2 Sheet_StudyGuide - Contribution Margin=Total...

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