Matching
Match the items below.
Premises:
The amount of revenue remaining after deducting variable costs.
Costs that contain both a variable and a fixed element.
The percentage of sales dollars available to cover fixed costs and produce income.
Identifies the activity which causes changes in the behavior of costs.
The difference between actual or expected sales and sales at the break-even point.
Costs that vary in total directly and proportionately with changes in the activity level.
The level of activity at which total revenues equal total costs.
The range over which the company expects to operate during the year.
Costs that remain the same in total regardless of changes in the activity level.
A method that uses the total costs incurred at the high and low levels of activity.
Responses:
Activity index
Variable costs
Fixed costs
High-low method
Relevant range
Mixed costs
Break-even point
Contribution margin
Margin of safety
Contribution margin ratio
Correct Answer:
Premises:
Responses:
The amount of revenue remaining after deducting variable costs.
Costs that contain both a variable and a fixed element.
The percentage of sales dollars available to cover fixed costs and produce income.
Identifies the activity which causes changes in the behavior of costs.
The difference between actual or expected sales and sales at the break-even point.
Costs that vary in total directly and proportionately with changes in the activity level.
The level of activity at which total revenues equal total costs.
The range over which the company expects to operate during the year.
Costs that remain the same in total regardless of changes in the activity level.
A method that uses the total costs incurred at the high and low levels of activity.
Premises:
The amount of revenue remaining after deducting variable costs.
Costs that contain both a variable and a fixed element.
The percentage of sales dollars available to cover fixed costs and produce income.
Identifies the activity which causes changes in the behavior of costs.
The difference between actual or expected sales and sales at the break-even point.
Costs that vary in total directly and proportionately with changes in the activity level.
The level of activity at which total revenues equal total costs.
The range over which the company expects to operate during the year.
Costs that remain the same in total regardless of changes in the activity level.
A method that uses the total costs incurred at the high and low levels of activity.
Responses:
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