Equations_for_Midterm_2_AIS_211

Equations_for_Midterm_2_AIS_211 - Midterm Review #2 Chapter...

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Midterm Review #2
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Chapter 6 Equation Summary CVP Algebra= Profit=CM*Q-F or CM Ratio * Sales- Fixed CM Ratio= CM/Sales or Unit CM/Unit Sales Price Units BE= Fixed Costs/Unit CM Total BE= Fixed Expenses/CM Ratio
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Equations Continued Target Profit Analysis Unit sales for Fixed Profit= (Fixed Ex+ Target Profit)/ Unit CM Dollar sales to attain target profit (Fixed expenses + Target Profit) / CM Ratio Margin of safety Total Budgeted(Actual Sales) - BE Sales % MoS= Margin of Safety Dollars/ Actual/Budget Sales
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Equations Continued Operating Leverage CM / Net Operating Income Multi Product Firms Assume “Basket” of products stays constant and use same formulas.
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Variable Costin-Ch 7 Absorption vs  Variable 
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Relation between Effect Relation between production on variable and and sales iniventory absorption income Inventory Absorption Production > Sales increases > Variable Production < Sales decreases < Absorption Production = Sales No change = Over time Variable and Absorption NI will be equal
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Ch 7-Variable Costing Also review advantages of variable costing Disadvantages of variable costing- Which method is more prevalent.
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This document was uploaded on 05/04/2009.

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Equations_for_Midterm_2_AIS_211 - Midterm Review #2 Chapter...

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