12. Using Break Even Analysis To Make Decisions Flashcards
0
Q
Contribution per unit
A
The difference between the selling price of one unit and the variable cost of producing one unit
1
Q
Contribution.
A
The difference between sales revenue and variable costs of production
2
Q
Total contribution
A
Unit contribution X no. Of units sold
3
Q
Break even level of output
A
The level of output that earns enough revenue to cover total costs of production.
4
Q
Margin of safety
A
The amount by which the existing level of output is greater than the break even level of output.
