(See related pages)
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| Break-even point | The unique sales level at which a company neither earns a profit nor incurs a loss. (See page(s) 1308) |
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| Composite unit | A specific number of units of each product in proportion to the expected sales mix. Multi-product CVP analysis treats this composite unit like a single product. (See page(s) 1316.) |
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| Contribution margin per unit | The amount that the sale of one unit contributes toward recovering fixed costs and profit. (See page(s) 1308) |
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| Contribution margin ratio | The contribution margin per unit expressed as a percentage of the product’s selling price. (See page(s) 1309) |
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| Cost-volume-profit analysis | The first step in the planning phase is predicting the volume of activity, the costs to be incurred, revenues to be received, and profits to be earned. (See page(s) 1298) |
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| Cost-volume-profit chart | A graphic representation of the cost-volume-profit relationships. (See page(s) 1309) |
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| Curvilinear cost | A cost that changes with volume but not at a constant rate like pure variable costs. (See page(s) 1301) |
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| Estimated line of cost behaviour | A line on a scatter diagram drawn to identify the historical relationship between cost and sales volume. (See page(s) 1303) |
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| Fixed cost | A cost that remains unchanged in total amount regardless of changes in output volume within a relevant range. (See page(s) 1299) |
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| High-low method | A method for drawing an estimated line of cost behaviour which uses cost data corresponding to the high and low sales volumes. (See page(s) 1303) |
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| Least-squares regression | A statistical method for deriving an estimated line of cost behaviour that is more precise than the high-low method. (See page(s) 1304) |
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| Margin of safety | The excess of expected sales over break-even sales. (See page(s) 1315) |
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| Mixed cost | A cost that acts like a combination of a fixed and a variable cost. (See page(s) 1300) |
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| Relevant range of operation | A business’ normal operating range; excludes extremely high and low volumes that are not likely to be encountered. (See page(s) 1299) |
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| Sales mix | The ratio of the volumes of the various products sold by a company. (See page(s) 1316) |
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| Scatter diagram | A graph used to display data about past cost behaviours and volumes for each period as points on a diagram. (See page(s) 1302) |
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| Step-wise cost | A cost that remains fixed over limited ranges of volumes but increases by a lump sum when volume increases beyond maximum amounts. (See page(s) 1300) |
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| Variable cost | A cost that changes in proportion to changes in activity volume. (See page(s) 1300) |