TOPIC 4- Accounting

Variable rate

100% - CM rate

CM rate per unit

40/100 = .40 = 40%

How can a company eliminate the need to be concerned about changes in the sales mix?

By having a similar contribution margin ratio for all of its products

CM rate

CM/Revenue

Mangerial accounting focuses on

Decision making

Calculating breakeven point in units

Fixed costs/CM per unit

Calculating breakeven point in dollars

Fixed costs/CM rate (%)

High Low Equation

High $- Low $ divided by High Vol. - Low Vol.

not regulated by GAAP

Managerial Accounting

The management process

Planning, Managing, and Controlling

Contribution Margin (CM)

Revenue - Variable Expenses

Contribution income statement format

Revenues - variable costs = Contribution margin - fixed costs = Operating income

CM per unit

Selling price per unit - variable cost per unit

Simplifying assumptions identified for the use of cost behavior pattern data include

Simplifying assumptions identified for the use of cost behavior pattern data include

Managerial Accounting

Supports the internal, future-oriented planning decisions made by management

Relevant Range

There is a normal range of production that a company does

To calculate total revenues at breakeven, fixed expenses are divided by the:

contribution margin ratio

The contribution margin format income statement is organized by:

cost behavior classification

Mixed costs are also referred to as:

semivariable costs