Name the definitions given below: ______________ 1. Technique that examines chan
ID: 2424103 • Letter: N
Question
Name the definitions given below:
______________
1.
Technique that examines changes in profits in response to changes in sales volumes, costs, and prices.
______________
2.
Percent by which the selling price (or revenue) per unit exceeds the variable cost per unit, or contribution margin as a percent of revenue.
______________
3.
Diagram of the relationship between total revenues and total costs; illustrates how an organization’s profits are expected to change under different volumes of activity.
______________
4.
Index of the extent to which the cost function is made up of fixed costs.
______________
5.
Total revenue minus total variable costs.
______________
6.
Proportion of different products or services that an organization sells.
______________
7.
Excess of an organization’s expected future sales (in either revenue or units) above the breakeven point.
______________
8.
The level of activity where equal cost or profit occurs across multiple alternatives.
______________
9.
Selling price per unit minus variable cost per unit.
______________ 10.
Level of operating activity at which revenues cover all fixed and variable costs and there is no profit.
______________ 11.
Margin of safety as a percentage of actual or estimated sales (units or revenues).
______________ 12.
A systematic tendency for people to be overly optimistic about the outcomes of their plans and projects.
______________
1.
Technique that examines changes in profits in response to changes in sales volumes, costs, and prices.
______________
2.
Percent by which the selling price (or revenue) per unit exceeds the variable cost per unit, or contribution margin as a percent of revenue.
______________
3.
Diagram of the relationship between total revenues and total costs; illustrates how an organization’s profits are expected to change under different volumes of activity.
______________
4.
Index of the extent to which the cost function is made up of fixed costs.
______________
5.
Total revenue minus total variable costs.
______________
6.
Proportion of different products or services that an organization sells.
______________
7.
Excess of an organization’s expected future sales (in either revenue or units) above the breakeven point.
______________
8.
The level of activity where equal cost or profit occurs across multiple alternatives.
______________
9.
Selling price per unit minus variable cost per unit.
______________ 10.
Level of operating activity at which revenues cover all fixed and variable costs and there is no profit.
______________ 11.
Margin of safety as a percentage of actual or estimated sales (units or revenues).
______________ 12.
A systematic tendency for people to be overly optimistic about the outcomes of their plans and projects.
Explanation / Answer
Answer:
1. Cost-volume-profit (CVP) analysis is a technique that examines changes in profits in response to changes in sales volumes, costs, and prices.
2. The contribution margin ratio (CMR) is the percent by which the selling price (or revenue) per unit exceeds the variable cost per unit, or contribution margin as a percent of revenue.
3. Cost volume Profit graph is a diagram of the relationship between total revenues and total costs; illustrates how an organization’s profits are expected to change under different volumes of activity.
4.Degree of operating Leverage is the Index of the extent to which the cost function is made up of fixed costs.
5. Contribution margin
6. sales mix
7. Margin of Safety
8. indifference point
9. Contribution margin per unit
10. breakeven point
11. Margin of safety percentage
12. Optimism bias
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