Chapter_6_and_7_vocabs

Chapter_6_and_7_vocabs - David Trinh 15:46:32...

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David Trinh 15:46:32 Accounting-301 Chapter 6-7 vocabs Activity index – The activity that causes changes in the behavior of costs. Break-even point – The level of activity at which total revenues equal total costs. Contribution margin (CM) - The amount of revenue remaining per unit after deducting variable costs. Contribution margin per unit The amount of revenue remaining per unit after deducting variable costs; calculated as unit selling price minus unit variable cost. Contribution margin ratio – The percentage of each dollar of sales that is available to apply to fixed costs and to contribute to net income; calculated as contribution margin per unit divided by unit selling price. Cost behavior analysis – The study of how specific costs respond to changes in the level of business activity. Cost-volume-profit (CVP) analysis – The study of the effects of changes in costs and volume on a company’s profits. Cost-volume-profit (CVP) graph – A graph showing the relationship between costs, volume, and profits. Cost-volume-profit (CVP) income statement – A statement for internal use that classifies costs as fixed or
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Chapter_6_and_7_vocabs - David Trinh 15:46:32...

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