CH 5

Question 1

Breakeven revenues

Answer 1

The sales vol in revenues at which profit equals zero

Question 2

Breakeven vol

Answer 2

The sales volume in units at which profit equals zero

Question 3

Contribution margin ratio

Answer 3

The unit contribution margin divided by the unit price

CMR represents the portion of each sales dollar

Question 4

Margin of safey

Answer 4

The percentage by which current sales exceed break sales

Question 5

Operating leverage

Answer 5

ratio of fixed costs to total cost ( TC=FC+VC)

Question 6

Product mix

Answer 6

Proportion, expressed in units, in which products are expected to be sold

Question 7

Unit contribution margin

Answer 7

contribution margin per unit

Question 8

Weighted unit contribution margin

Answer 8

Unit contribution margin averaged across multiple products. UCM being weighted by product mix

Question 9

Weighted CMR

Answer 9

contribution margin ratio averaged across multiple products. The product’s contribution margin ratio is weighted by its share of revenues