Chapter 3 lecture Flashcards
1
Q
Breakeven revenue
A
total revenue
2
Q
Breakeven volume
A
number of units sold
3
Q
Breakeven Point Formula
A
o In units: BEP unit quantity = FC / CMu
o Sales revenue: BEP sales = FC / CM%
4
Q
Sensitivity Analysis
A
• What happens to profit if o Selling price changes o Volume changes o Cost structure changes • Variable cost per unit changes • Fixed cost changes
5
Q
Multiple Cost Drivers Formula
A
o OI = Revenue – (UVC1 x Q1) + (UVC2 x Q2) – FC • UVC1 = unit variable cost driver 1 • UVC2 = unit variable cost driver 2 • Q1 = quantity of cost driver 1 • Q2 = quantity of cost driver 2
