ACCT 1A Lecture Notes - Lecture 4: Participatory Budgeting, Contribution Margin, Operating Leverage

• School: Irvine Valley College
• Department: Accounting
• Course: ACCT 1A
• Professor: Urell

Document Summary

Traditional income statements and contribution margin statement. Use cvp analysis and allow one or more variables to change while holding everything else constant. Level of sales at which contribution margin just covers fixed costs. Plans dealing with the acquisition and use of resources. Is much more than a number crunching exercise. It is a over a specified time period. management task that requires a great deal. Starts with departmental managers and then flows up through middle management and ultimately to top management. Sales production, direct materials and labour, overheads, selling and admin, cash. Sales purchases, overheads, selling and admin, cash. Budgets established at the beginning of the period. Show differences in cost owing to volume differences. Budget for a single unit of a product or a service. Process of taking action only when actual results deviate significantly from planned. Difference between flexible budget operating income and the actual operating income. Difference in sales revenue between flexible budget and actual results.