ACC/400 July 19‚ 2015 Theresa Pekron Exercise 20.1 – Accounting Terminology Listed below are nine technical accounting terms introduced in this chapter: Variable costs Relevant range Contribution margin Break-even point Fixed costs Semi variable costs Economics of scale Sales mix Unit contribution margin Each of the following statements may (or may not) describe one of these technical terms. For each statement‚ indicate the accounting term described‚ or answer “None” if the statement does
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Conversion Cost NO. Prime Cost NO.....Conversion Cost YES. Instructor Explanation: Chapter 2 Points Received: 6 of 6 Comments: 2. Question : (TCO A) A cost incurred in the past that is not relevant to any current decision is classified as a(n) Student Answer: period cost. incremental cost. opportunity cost. None of the above Instructor Explanation: Chapter 2 Points Received: 6 of 6 Comments: 3. Question
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BYP6-2 ACC/349 Managerial Analysis: BYP6-2 (a) Compute and interpret the contribution margin ratio under each approach. Current approach: 800‚000 / 2‚000‚000 = 0.4 Automated approach: 1‚600‚000 / 2‚000‚000 = 0.8 (b) Compute the break-even point in sales dollars under each approach. Discuss the implications of your findings. Breakeven Point – Fixed Expenses / Contribution Margin Ratio Current Approach: 200‚000 / .4 = $500‚000 Automated Approach: 600‚000 / .8
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CHAPTER 3 COST-VOLUME-PROFIT ANALYSIS TRUE/FALSE 1. To perform cost-volume-profit analysis‚ a company must be able to separate costs into fixed and variable components. Answer: True Difficulty: 1 Objective: 1 Terms to Learn: cost-volume-profit (CVP) analysis 2. Cost-volume-profit analysis may be used for multi-product analysis when the proportion of different products remains constant. Answer: True Difficulty: 1 Objective: 1 Terms to Learn: cost-volume-profit
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CVP Analysis | The CVP analysis helps in taking more than one decisions in a firm. How would you substantiate this statement for a unit under expansion phase | | Abstract Companies commonly face major uncertainties in their product markets‚ particularly in the manufacturing industry where competition is often fierce and consumer tastes change rapidly. Managers need to estimate future revenues‚ costs‚ and profits to help them plan and monitor operations and to decide the mix and volumes of goods
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Cost-Volume-Profit analysis (CVP) for Snap Fitness provides an evaluation of its profits as costs and volume changes. As the owner of a Snap Fitness franchise‚ decisions about selling prices‚ product mix‚ and maximizing the use of the fitness center depends on CVP. A CVP analysis classifies cost as variable and fixed‚ and calculates a contribution margin. Relevant information identified in the analysis is the total monthly fixed costs of Snap Fitness‚ which are $6‚000. Monthly fixed operating costs are
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1: In the early 1980s‚ as Fuji launched an aggressive export drive‚ Kodak was attacked in the North American & European markets. Fuji was taking over the markets & made Kodak realize that it was time to be alert & more aggressive. This led to the decision of being more defensive & thus Kodak started considering Japanese market more seriously. Answer 2: I strongly believe that the charges were valid. By systematically denying Kodak’s access to Japanese distribution channels for consumer film
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obvious to the owners that relocation was necessary. So in 2004 the owners‚ Gretchen Reeves and Michaela Hurd made the decision to relocate to a larger building in an effort to expand and grow the business. Since the new facility was only two block away from the original location‚ it was anticipated that there would be no loss of their loyal customer base. The owners also made the decision to expand the product line in hopes of increasing sales. However‚ the company faced stiff competition from large retailers
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Advanced Management Accounting Chapter 1 A management accounting system is an information system that collects operational and financial data‚ processes it‚ stores it‚ and reports it to users (such as workers‚ engineers‚ managers‚ and executives). What the organization tries to deliver to customers is called its value proposition Planning includes activities such as product planning‚ production planning and strategy development. What are the four generic elements of an organization’s
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level of activity 3. per unit variable costs 4. total fixed costs 5. mix of products sold Because CVP analysis helps managers understand the interrelationships among cost‚ volume‚ and profit‚ it is vital tool in many business decisions. These decisions include‚ for example; a. what products to manufacture or sell b. what pricing policy to follow c. what marketing strategy to employ‚ and d. what type of productive facilities to acquire B. Marginal and absorption costing:
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