Womack Report

July 24, 2007

Managerial Accounting, July 24

Filed under: Accounting,Notes,School — Phillip Womack @ 6:22 pm

Taking attendance as of 6:10. Most of the class is fairly concerned about the test we just took. We won’t be getting them back yet; he’s only graded half or so of them. Initial commentary suggests that the concern is warranted.

Chapter 6: Cost-Volume-Profit Relationships

Contribution Margin is the amount remaining from sales revenue after variable expenses have been deducted. It is the amount available to cover fixed expenses and provide profits for the period.

The break-even point is the amount of sales which will result in no profit or loss. It is the point at which the contribution margin equals the fixed expenses for the period.

The Contribution Margin Ratio is equal to total contribution margin divided by total sales, or the unit contribution divided by unit sales prices.

Profit = (Sales – Variable Expenses) – Fixed Expenses.

Sales = Variable expenses + fixed expenses + profit.

Sleepy tonight.  Need to reexamine this chapter.

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

Powered by WordPress