Breakeven Analysis - 30%

Question 1

What is the formula for profit ?

Answer 1

( sales volume x unit contribution) - fixed costs

Question 2

What is the contribution required to break even ?

Answer 2

Fixed costs

Question 3

What is the formulas to find the break even point

Answer 3

Fixed cost / unit contribution

Or

Contribution required to break even / unit contribution

Question 4

What is the formula for sales revenue at breakeven point ?

Answer 4

Fixed costs / contribution to sales ratio

Question 5

What is the formula for margin of safety ?

Answer 5

Budgeted sales unit - break even sales units

Or

((Budgeted sales- breakeven sales ) / budgeted sales) x100%

Question 6

What is the formula for sales volume to achieve target profit

Answer 6

( fixed costs + target profit ) / unit contribution

Question 7

What is the formula for contribution to sales ratio ?

Answer 7

(Contribution/ sales) x 100%