Chapter 18

Question 1

Variable cost per unit (VCPU)

Answer 1

= (High cost $ - Low cost $) / (High units - Low units)

Question 2

Total fixed costs

Answer 2

= High cost $ - (High units x VCPU) or Low cost $ - (low units x VCPU)

Question 3

Unit contribution margin (UCM)

Answer 3

= Unit selling price - Unit variable costs

Question 4

Contribution Margin Ratio (CMR)

Answer 4

= Unit contribution margin / unit selling price

Question 5

Break-Even in Units

Answer 5

= FC / UCM

Question 6

Break-Even in $

Answer 6

= FC / CMR

Question 7

Sales Units for Target NI

Answer 7

= (FC + Target NI) / UCM

Question 8

Sales $ for target NI

Answer 8

= (FC + Target NI) / CMR

Question 9

Margin of Safety $ (MOS)

Answer 9

= Actual (Expected) Sales - Break Even Sales

Question 10

Margin of Safety Ratio

Answer 10

= MOS / Actual (Expected) Sales