Term
| Contribution Margin Statement |
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Definition
| recognizes income data by grouping the cost by variability. |
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Term
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Definition
| the amount that remains after subtracting variable cost from revenue |
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Term
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Definition
| The variable and fixed portions of a company's cost. |
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Term
| Account Classification Method |
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Definition
| involves systematically categorizing a company's cost accounts as fixed or variable |
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Term
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Definition
| uses two observations of aggregate cost data to estimate total fixed cost and variable cost. |
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Term
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Definition
((Total High Cost)-(Total Low Cost))/
((Total High units)-(Total Low Units)) |
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Term
| Account Classification Flaws |
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Definition
| It can be very difficult to qualify which cost are variable and which are fixed. |
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Term
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Definition
It is a rough estimate.
It only uses two points so the room for error is much higher than if they were to use multiple points |
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Term
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Definition
| a statistical method for estimating fixed and variable cost. Uses all available data to come up with a line of best fit |
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Term
| Evaluation of Regression Analysis |
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Definition
| It makes a lot of assumptions about data, and accounting data sometimes do not satisfy these assumptions. |
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Term
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Definition
| Normal range of operations |
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Term
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Definition
| this is calculated by subtracting fixed cost traceable to a product from its contrbutino margin. |
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