Mana Accounting Ch.6

What two analysis options are there when estimating the fixed and variable components of a mixed cost

Account analysis or the engineering approach.

The break-even point calculation is affected by ___?

Sales mix, costs per unit, and selling price per unit.

CVP analysis focuses on how profits are affected by?

Sales volume, selling price, total fixed costs, unit variable cost, mix of products sold

It makes sense to perform a high-low or regression analysis if a scattergraph plot reveals ______ ______ _______.

Straight line behavior

Degree of operating leverage

The measure of how a percentage change in sales affects profits at any given level of sales is the ___________.

Sales Mix

The term used for the relative proportion in which a company's products are sold

To prepare a CVP graph, lines must be drawn representing total revenue, _____.

Total expense, and total fixed expense

Engineering approach

a detailed analysis of cost behavior based on an industrial engineer's evaluation of the inputs that are required to carry out a particular activity and of the prices of those inputs.

Account analysis

a method for analyzing cost behavior in which an account is classified as either variable or fixed based on the analyst's prior knowledge of how the cost in the account behaves.

Cost structure

refers to the relative portion of fixed and variable costs in an organization.