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?
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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
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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
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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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