Flashcards ACIS 2116

Gross Margin

revenue− Cost of Goods Sold

Net operating income

Gross margin − Selling and administrative expenses

Contribution Margin

Sales - Variable Expenses

CM per unit

sales price per unit - variable cost per unit

CM Ratio

Contribution Margin / Sales

COGM

beginning WIP + total manufacturing costs - ending WIP

COGS

Beginning Finished Goods + COGM − Ending Finished Goods

Direct material used

Beginning Raw Materials + Purchases − Ending Raw Materials − Indirect materials

POHR

Estimated total manufacturing overhead ÷ Estimated total allocation base

Applied Overhead

Predetermined overhead rate × Actual allocation-base activity

Total Job Cost

Direct materials + Direct labor + Applied manufacturing overhead

Break-even Units

fixed expenses / contribution margin per unit

Break Even Sales

Fixed Expenses / CM Ratio

Target-profit Units

(Fixed expenses + Target profit) ÷ CM per unit

Target profit sales

(Fixed expenses + Target profit) ÷ CM ratio

Margin of Safety

Actual sales − Break-even sales

Degree of Operating Leverage

Contribution margin ÷ Net operating income