Accounting: Break Even Analysis

Question 1

Contribution

Answer 1

Selling price - variable costs

Question 2

Total contribution

Answer 2

Contribution X No. of units sold

Question 3

Profit

Answer 3

(No. Units sold X contribution) - fixed costs

Question 4

Break-even sales volume

Answer 4

Fixed costs/contribution(unit)

Question 5

Break even in sales revenue

Answer 5

Break even(unit) X selling price

Question 6

Margin of safety(units)

Answer 6

[Budgeted sales(units)] - [break even(units)]

Question 7

Margin of safety(%)

Answer 7

[margin of safety(units)/Budgeted sales(units)] X 100

Question 8

Sales volume to achieve targeted profit

Answer 8

Fixed cost + targeted profit / contribution (units)