m30bchapter2.pptx

# m30bchapter2.pptx - henko Tisc tterstock hu Irina/S ign...

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Chapter Universal Sports Exchange © Tis c he nko I rina / S h ut t e rs t oc k © js nyd erd e s ig n/ S t o c k p ho t o ©aopsan/Stockphoto ©pe t e k a r i c i / S to ck photo ©petek ar i c i /S to c k photo COST BEHAVIOR AND COST ESTIMATION 2

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Unit Universal Sports’ income statement 2.1 Sales \$ 1,039,500 COGS 769,230 Gross Profit \$ 270,270 Selling and administrative expense 230,370 Operating income \$ 39,900 Tax expense (30%) 11,970 Net Income \$ 27,930 What would Universal Sports’ net income be if it met the original sales volume projection?
Cost Behavior Patterns U ni t 2. 1 Universal Sports Exchange

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Unit Variable Fixed Step-Variable Mixed 4 types of cost behavior 2.1
Unit You’ve been studying for several hours and are getting ready to take a study break, so you break open a nice cold can of soda. Just then the doorbell rings and in come three friends. It’s time for a study break! 2.1

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Unit 2.1 Here’s the drink bill Friends Cost per can Total cost 1 \$0.75 \$0.75 2 \$0.75 \$1.50 3 \$0.75 \$2.25 4 \$0.75 \$3.00
Unit 2.1 Variable cost 0 1 2 3 4 \$0.00 \$0.50 \$1.00 \$1.50 \$2.00 \$2.50 \$3.00 \$3.50 People Total cost of sodas Cost per unit remains constant with changes in volume Total cost varies proportionately with changes in volume

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• Winter '08
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