Chapter 10 - Cost Volume Analysis Flashcards
1
Q
what is contribution margin (cm)?
A
Contribution Margin - Difference between selling price and variable cost
2
Q
what is margin of safety?
A
Margin of Safety - excess over sales at break-even
3
Q
what is CVP equation for single product?
A
0 = (selling price x unit sold) - (variable cost x unit sold) - Fixed cost
4
Q
what is contribution margin ratio formula?
A
contribution margin ratio = cm / selling price
