Chapter 5 formulas

Question 1

Break-even point in units

Answer 1

Total fixed costs/ cm/u

Question 2

Contribution margin per unit ( cm/u)

Answer 2

selling price- variable cost

Question 3

Sales in units required for a given profit

Answer 3

(total fixed costs + required profit)/ cm/u

Question 4

Contribution margin ratio (CMR)

Answer 4

cm/u/ selling price per unit OR
Total contribution margin/total sales

Question 5

break even ($$)

Answer 5

fixed costs/ CMR

Question 6

DOL

Answer 6

contribution margin/ EBIT

Question 7

DFL

Answer 7

EBIT/ EBT

Question 8

DCL

Answer 8

DOL x DFL
OR
CM/EBT