Chapter 7: Break Even Analysis Flashcards

1
Q

What is breaking even?

A

When you make neither a profit or a loss.

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2
Q

What is the calculation for break-even?

A

B = F/(p-v)

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3
Q

What is the margin of safety?

A

Difference between the number of units you predict to sell and the number of units required to match your break-even point.

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4
Q

What is the calculation for MoS?

A

M = Predicted sales volume - break even sales volume

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5
Q

What does C/S stand for?

A

Contribution to sales

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6
Q

What is the calculation for contribution to sales ratio?

A

C/S = (P-V) / P

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7
Q

How do you calculate the Break-even Revenue?

A

Break - even revenue = F / Contribution to sales ratio

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8
Q
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8
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