Chapter 10 Flashcards
1
Q
Breakeven point is when contribution is equal to…?
A
Total fixed costs
2
Q
BEP =
A
TFC/CPU
3
Q
What are the two ways that the breakeven point can be calculated? (2 calcs)
A
- BEP = TFC/CPU
- BEP = Contribution required to breakeven/CPU
4
Q
Margin of safety expressed as a % of budgeted sales =
A
[(Budgeted output - Breakeven output) / Budgeted output] x 100
5
Q
Sales volume for a target profit =
A
Fixed costs + Target profit / CPU
6
Q
Sales revenue for a target profit =
A
Fixed costs + Target profit / CS ratio
CS ratio = TC/TR or CPU/SPU
7
Q
What are the two ways to calculate CS ratio?
A
TC/TR or CPU/SPU
8
Q
How do you calculate BEP as sales revenue?
This is different to ‘as units’ being TFC/CPU.
A
TFC/CS ratio
CS ratio can be calculated as:
TC/TR or CPU/SPU
CPU = Selling price less all unit variable costs
