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Exam 2 Review

Horizontales
This analysis assumes that the average variable expense per unit is constant.
Contribution margin minus any traceable fixed expenses.
A cost that differs between alternatives in a decision.
Computed by dividing contribution margin by dollar sales.
If this exists, the manager will decide to retain the product line or segment.
Any cost that has already been incurred, depreciation is an example.
The excess of dollar sales over the break-even dollar sales.
When the contribution margin is equal to fixed expenses.
Verticales
Synonymous with relevant cost.
This type of analysis is used to estimate what sales volume is needed to achieve a specific target profit.
Costing method that includes all manufacturing costs in the unit product costs.
Costing method that includes only variable manufacturing costs in the unit product costs.
These fixed costs can be allocated to a particular business segment or division.
These fixed costs support more than one business segment and are not allocated to the various business segments.
The break-even point in unit sales ________when variable expenses increase and the selling price remains unchanged.