MGMT+30B+CH+6+NOTES

MGMT+30B+CH+6+NOTES - MANAGEMENT 30 B CHAPTER 6 NOTES COST...

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MANAGEMENT 30 B CHAPTER 6 NOTES COST VOLUME PROFIT ANALYSIS AMONG: COST VOLUME PROFIT BY FOCUSING ATTENTION ON THE INTERACTION AMONG: SALES PRICES OF PRODUCTS VOLUME OF ACTIVITY PER UNIT VARIABLE COSTS TOTAL FIXED COSTS MIX OF PRODUCTS SOLD 1 C-V-P HELPS MANAGERS UNDERSTAND THE INTER RELATIONSHIPS
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CONTRIBUTION MARGIN: INCOME STATEMENT SALES PRICE $100 SALES VOLUME 1,000 UNITS SALES $100,000 LESS: VAR 70,000 CONTRIB MARGIN 30,000 LESS: FIXED EXP 10,000 NET OPER INC $20,000 HELPS TO QUICKLY SEE THE IMPACT ON PROFITS DUE TO CHANGES IN PRICE VOLUME COSTS EMPHASIS IS ON COST BEHAVIOR VARIABLE COSTS ARE SEPARATED FROM FIXED COSTS 2 CONTRIBUTION MARGIN IS FIRST USED TO COVER FIXED EXP'S AND
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AND REMAINING CM CONTRIBUTES TO NET OPER INCOME SALES - VARIABLE EXPENSES = CONTRIBUTION MARGIN THIS IS EXPRESSED IN GENERAL OR ON A PER UNIT BASIS PER UNIT SALES $100,000 $100 LESS: VAR 70,000 70 CONTRIB MARGIN 30,000 30 LESS: FIXED EXP 10,000 10 NET OPER INC $20,000 $20 FOR EACH ADDITIONAL UNIT SOLD AN ADDITIONAL $30 IN CM
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MGMT+30B+CH+6+NOTES - MANAGEMENT 30 B CHAPTER 6 NOTES COST...

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