Chapter 6 Formulas and Definitions Flashcards
unit CM formula
CM / sales or CM per unit / SP per unit
degree of operating leverage formula
CM / net operating income
net income formula
revenue - expenses
profit formula
(sales - variable expenses) - fixed expenses
revenue formula
sales price x quantity sold
expenses formula
total fixed costs + (variable costs x quantity)
sales formula
sales price x quantity sold
CM ratio
(sales - variable expenses) /sales
unit sales to break even formula
fixed expenses / CM per unit
dollar sales to break even formula
fixed expenses / CM ratio
unit sales to attain target profit formula
(target profit + fixed expenses) / unit CM
dollar sales to attain target profit
(target profit + fixed expenses) / CM ratio
margin of safety formula
total sales - break even sales
margin of safety in units
margin of safety / sales price
margin of safety in percentage
((sales - breakeven point) / sales) *100
