Chapter 5 - Formulas

Question 1

Fixed Expenses / Unit CM

Answer 1

Unit sales to break even

Question 2

Selling Price - Variable Cost

Answer 2

Unit CM

Question 3

Sales - Variable Expenses

Answer 3

Contribution Margin

Question 4

(Sales - Variable Expenses) - Fixed Expenses

Answer 4

Profit

Question 5

Contribution Margin - Fixed Expenses

Answer 5

Net Operating Income

Question 6

(Units Sold - Units to Break-Even) * CM per Unit

Answer 6

Net Operating Income

Question 7

Total Variable Expenses / Sales

Answer 7

Variable Expense Ratio

Question 8

Contribution Margin / Sales

Answer 8

Contribution Margin Ratio

Question 9

(Target Profit + Fixed Expenses) / Unit CM

Answer 9

Units Sales to Attain the Target Profit

Question 10

(Unit CM * Unit Sales) - Fixed Expense

Answer 10

Profit (In Terms of Sales Volume)

Question 11

CM Ratio * Sales - Fixed Expenses

Answer 11

Profit

Question 12

Margin of Safety in dollars / Total Sales

Answer 12

Margin of Safety %

Question 13

(Target Profit + Fixed Expenses) / CM Ratio

Answer 13

Dollar sales to Attain a Target Profit

Question 14

Total Sales - Break-Even Sales

Answer 14

Margin of Safety (In Dollars)

Question 15

Fixed Expenses / CM Ratio

Answer 15

Break-Even Sales

Question 16

CM / Net Income

Answer 16

Degree of Operating Leverage

Question 17

DM/Unit + DL/Unit + VMOH/Unit + (FMOH / Units Produced)

Answer 17

Unit Cost of Production (Absorption Costing Method)