ACC 206 Ch 2 Vocab

  1. cost behavior
    how the activities of an organization affects its costs
  2. cost drivers
    measures of activities that require the use of resources and thereby cause costs
  3. variable cost
    changes in direct proportion to changes in the cost driver
  4. fixed cost
    changes in the cost driver do not immediately affect
  5. relevant range
    the limit of cost-driver level within which a specific relationship between costs and the cost driver is valid
  6. cost-volume-profit (CVP) analysis
    the study of the effects of output volume on revenues, expenses, and net income.
  7. break-even point
    the level of sales at which the revenue equals expenses
  8. unit contribution margin / marginal income
    sales price - variable cost per unit
  9. total contribution margin
    total number of units sold x unit contribution margin
  10. variable-cost ratio / contribution-margin ratio
    the ratios of the sale attributed to variable cost and contribution margin
  11. sales mix
    the relative proportions or combinations of quantities of different products that constitute total sales
  12. incremental effect
    the change in total results ( such as revenue, expenses, or income) under a new condition in comparison with some given or known condition
  13. operating leverage
    the firm's ratio of fixed to variable costs
  14. margin of safety
    shows how far sales can fall below the planned level of sales before losses occur
  15. Gross Margin / Gross Profit
    the excess of sales over the cost of goods sold
Card Set
ACC 206 Ch 2 Vocab
The Vocabulary from Chapter 2 of Management Accounting 206