notes-c6 - C6- ACRONYMS Instructors Supplemental...

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1 C 6 - ACRONYMS notesc6.doc Instructor’s Supplemental Information Written by Professor Gregory M. Burbage, MBA, CPA, CMA, CFM © ACRONYMS (ABBREVIATIONS) FOR USE WITH MANAGERIAL ACCOUNTING RELATING TO COST-VOLUME-PROFIT ANALYSIS. CM Contribution Margin in total dollars UCM Unit Contribution Margin CMR Contribution Margin Ratio S Sales Revenue in total dollars USP Unit Sales Price FC Fixed Costs/Expenses in total VC Variable Costs in total UVC Unit Variable Cost BEP Break-Even Point (non-specific as to dollars or unit) BEP$ Break-Even Point in dollars BEP# Break-Even Point in number of units NI Net Income TC Total Cost ( TC = FC + VC ; TC = COGS + SELL + ADM ; TC = Period + Product ) TP Target Profit (desired net income) MS Margin of Safety in dollars MS% Margin of Safety as a percentage of sales OP LEV Operating Leverage # number of items, as in number of units
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2 C 6 - COST-VOLUME-PROFIT RELATIONSHIPS notes-c6.doc Written by Professor Gregory M. Burbage, MBA, CPA, CMA, CFM © CHAPTER LEARNING OBJECTIVES: MAJOR: - Be able to calculate: cmr, ucm, cm, bep#, bep$, tp#, tp$, op lev, ms, ms% - Identify limiting assumptions of CVP analysis. MINOR: - CVP graph - Sales mix LIMITING ASSUMPTIONS IN CVP ANALYSIS: - Linear revenues and costs - Cost behavior is either F or V, and MC can be divided into F or V. - Sales mix is constant - No change in inventories (i.e., production = sales) - No change in worker/machine productivity and efficiency. - Time value of money concept ignored.
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notes-c6 - C6- ACRONYMS Instructors Supplemental...

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