Understanding Cost-Volume-Profit Analysis: Gross Profit, Margin, Break-Even, and Leverage, Quizzes of Financial Accounting

Download Understanding Cost-Volume-Profit Analysis: Gross Profit, Margin, Break-Even, and Leverage and more Quizzes Financial Accounting in PDF only on Docsity! TERM 1 cost-volume-profit analysis DEFINITION 1 tool that focuses on the relationships among a company's profits and 1 the prices of products and services, 2 the volume of products and services, 3 the per-unit variable costs, 4 the total fixed costs and 5 the mix of products or services provided TERM 2 gross profit DEFINITION 2 difference between sales and cost of goods sold TERM 3 contribution margin per unit DEFINITION 3 sales price per unit of product, less all variable costs to produce and sell the unit of product; used to calculate the change in contribution margin resulting from a change in unit sales TERM 4 contribution margin ratio DEFINITION 4 contribution margin divided by sales; used to calculate the change in contribution margin resulting from a dollar change in sales TERM 5 break-even point DEFINITION 5 level of sales at which the contribution margin just covers fixed costs and income is equal to zero