3.3 Break-even analysis Flashcards
1
Q
Contribution per unit
A
Contribution per unit = price per unit - variable cost per unit
2
Q
What do you get if you calculate total revenue - total variable cost
A
Total contribution
3
Q
Margin of Safety
A
noted. A measure of the difference between the break-even level of output and the actual (current) level of output is known as the margin of safety
4
Q
Target profit
A
the expected profit based on a quanity of output that exceeds the required break even output
