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by: Modesto Williamson


Modesto Williamson
GPA 3.9

P. Sun

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P. Sun
Class Notes
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This 4 page Class Notes was uploaded by Modesto Williamson on Tuesday October 13, 2015. The Class Notes belongs to ACCT 2101 at Louisiana State University taught by P. Sun in Fall. Since its upload, it has received 18 views. For similar materials see /class/223050/acct-2101-louisiana-state-university in Accounting at Louisiana State University.

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Date Created: 10/13/15
Accounting Test 2 chapters 678 I total fixed cost Breakeven Units Contribution Margin per Unit B k S 1 total fixed cost Tea even a es Contribution Margin Ratio I I I I Contribution Margin per Unit Contribution Margin Ratio Sales Price Contribution Margin per Unit Sales Price Variable Costs I I I Fixed cost Total Contribution Margin Contribution Margin per Unit I Fixed Cost target profit Target Units Contribution Margin per Unit T t S 1 Total fixed cost target profit Wye a es Contribution Margin Ratio Target Sales Target Units gtlt Unit Sales Price Margin of Safety Actual or budgeted Sales Breakeven sales I I Actual or Budgeted Sales Breakeven Sales Margin of Safety Ratio Actual or budgeted Sales I Contribution Margin per Unit Operating Leverage Net Operating Income Net Operating Income Contribution Margin per Unit Fixed Costs Units of Product Unit mix Total units of Product Weighted Average Contribution Margin unit CM product 1 X unit mix product 1 unit CM product 2 X unit mix product 2 Individual Contribution Margin CMPU X of sales Budgeted RM purchases RM needed RM end invent RM beg Inventory Definitions Chapter 6 Sales mix The relative mix ofproducts or services sold by a company as a percentage of total sales revenue Used to compute the weighted average contribution margin ratio Margin of Safety Difference between actual or budgeted sales and the breakeven point Identifies how much sales can drop before the business will suffer Degree of Operating Leverage The extent to which the fixed costs are used to operate the business If fixed costs are used to a higher degree than variable costs the company is more highly leveraged Chapter 7 Relevant cost a cost that occurs in the future and differs between decision alternatives It has the potential to in uence a decision Opportunity Cost Forgone benefit or lost opportunity of choosing one opportunity instead of another Sunk Cost Costs incurred in the past that are not relevant to future decisions Chapter 8 Budgeting benefits Thinking Ahead forces managers to set goals and look to the future Provides leadtime to solve potential problems Communication communicating management s expectations and priorities Promotes cooperation and coordination between areas Motivation providing motivation for employees to work toward Organizational objectives Provides benchmark for evaluating performances Master Budget Components Operating budget Sales budget Production budget Raw materials purchases budget Direct labor budget Manufacturing overhead budget Selling and Administration Expense budget Cost ofGoods Sold Budget Income statement Financial budget Budgeted balance sheet Budgeted cash payments Capital expenditures budget Cash budget Balance Sheet Sales Budget of sales units X Sales Price SP Total revenue Production Budget Sales desired ending inventory of finished goods total needed for the period 39 39 inventorV of finished goods Units to be produced Purchases Budget Units to be Produced X Quantity of Materials Raw materials required for production Desired Ending Inventory of Raw Materials Total Raw Materials Needed 39 39 Inventorv of Raw Materials Raw Materials to be purchased X purchase price Total Raw Materials Cost Payment schedule of payment X credit purchases Direct Labor Units to be produced X guantity of Labor Hours Total Labor Hours X Labor Rate Total Labor Cost Overhead and Selling and Administrative Variable and fixed cost concepts Variable cost per driver X of the drivers used Total Variable Costs Fixed costs per period Total Manufacturing Overhead and Selling and Administrative Budgets respectively Not always driven by units or lab or hours No need to know how to prepare the numbers budget Cash Budget Beg Balance Cash receipts Available cash Withdrawals Excess or deficiency Financing Section Borrowings Repayments Total Financing Excess or deficiency or Total Financing Ending Balance must meet at least minimum requirements


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