| A | B |
|---|
| When sales equals costs | Break-Even Point |
| Other names for mixed costs are: | semi-fixed cost, and semi-variable cost. |
| To determine the “cost behavior” you must know | what the total costs do over differing levels of sales or production. |
| When the bottom line of an Income Statement report would be exacty $0 | Break-Even Point |
| On a break-even point chart, even at zero unit sales, | the cost line will not go down to zero. |
| Depreciation expense is a ________ cost. | Fixed Cost |
| Where the cost line intersects with revenue line on a break-even chart | Break-Even Point |
| Wages are ________ costs. | Variable Costs |
| Total revenue equals total fixed costs plus total variable costs | Break-Even Point |
| What is left over after paying direct costs | Contribution Margin |
| The 2 costs involved in calculating Break-even Point | Fixed Costs (on top of the fraction) and Variable Costs (used on the bottom of the fraction) |
| If this is negative, then the more you sell the bigger the Net Loss will grow | Contribution Margin |
| The one thing added to the Break-Even Point fraction to do profit planning | The desired Net Income (added on top of the fraction to Fixed Costs) |
| The remainder from Sales revenue after paying Variable Costs that can be used to pay Fixed Costs and when all Fixed Costs are paid it creates the profit. | a positive Contributin Margin |
| Sales minus Variable Costs | Contribution Margin |
| The 1 other item needed to calculate Break-Even Point besides the 2 costs | Sales (or Sales Revenue) |
| If this is not positive you will never pay any Fixed Costs | Contribution Margin |
| The types of Variable Costs that should be used in finding the Break-Even Point are | ALL: variable manufacturing costs, variable selling expenses, and variable general and administrative expenses |
| True/False: Having a positive Contribution Margin does not guarantee a Net Income. There has to be a high enough level of sales also. | TRUE |
| The types of Fixed Costs that should be used in finding the Break-Even Point | ALL: fixed factory overhead costs, fixed selling expenses, and fixed general and administrative expenses |
