Breakeven analysis Flashcards

1
Q

Total contribution

A

CPU x sales volume

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2
Q

Breakeven point

A

Total fixed cost / contribution per unit

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3
Q

Contribution ratio

A

total contribution / total revenue
or
contribution per unit / selling price per unit

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4
Q

Revenue generated at the Breakeven point

A

Fixed costs / contribution ratio

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5
Q

Margin of safety (units)

A

Budgeted sales volume - breakeven sales volume

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6
Q

Margin of safety (%)

A

(Budgeted output - Breakeven output) / Budgeted output

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7
Q

Contribution per unit

A

CPU = selling price per unit - selling cost per unit

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8
Q

sales volume for a target profit

A

(Fixed costs + target profit) / contribution per unit

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9
Q

Limiting factor analysis

A
  1. calculate contribution per unit for each product
  2. Calculate contribution per limiting factor each product
  3. Rank the products in accordance with step 2 findings
  4. Allocate and detainee optimal plan
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10
Q

Make or buy

A
  1. Calculate cost saving per unit if made internally
  2. Calculate savings per limiting factor (cost savings / limiting factor)
  3. rank in accordance with findings in 2.
  4. Allocate and determine optimal production plan.
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