Managerial Accounting Flashcards
What is the difference between financial statements and managerial accounting?
financial statements - prepared financial statements that are general
managerial accounting - prepared according to management needs, as needed, sometimes focused on a segment of the business
What are fixed costs
resources that do not vary with change in volume
what are variable costs
resources that vary in proportion to changes in an activity base
what are mixed costs
resources that part variable and part fixed
what is a contribution margin
sales - variable cost
What are unit level costs
costs that vary with the change in volume of units
what are batch level costs
costs that vary with changes in the volume of lots, batches and groups of products
what are product level costs
costs that vary with changes in the number of sku’s and codes
what are customer level costs
costs that vary with the number and intensity of customer service
What are avoidable costs
costs that would be eliminated if an activity were no longer required
what are incremental costs
costs that would increase if an activity were added or increased
what are sunk costs
costs that are unaffected by a future decision and should be considered irrelevant to a decision
money already spent
what are opportunity cost
the margin or benefit foregone from selecting an alternative course of action
What is the net income formula? and how can you use it to do a break even analysis?
Net Income = sales(X * volume) - variable costs(X*volume) - fixed costs
make net income “0”, solve for x
what is the break even point for units formula?
Total fixed costs / contribution margin per unit
