Cost Chapter 5 Formulas Flashcards by Laura Sullivan | Brainscape

Q

Contribution margin

A

sales - variable costs

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Q

Contribution margin ratio

A

CM / sales

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Q

Unit contribution margin ratio

A

unit CM / unit selling price

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Q

Change in contribution margin

A

CM ratio x change in sales

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Q

Variable expense ratio

A

variable expenses / sales

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Q

Unit sales to attain target profit

A

(Target profit + fixed expenses) / unit CM

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Q

Dollar sales to attain target profit

A

(Target profit + fixed expenses) / CM ratio

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Q

Unit sales to break even

A

fixed expenses / unit CM

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Q

Dollar sales to break even

A

fixed expenses / CM ratio

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Q

Margin of safety in dollars

A

total sales - break-even sales

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Q

Margin of safety percentage

A

margin of safety in dollars / total sales

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Q

Degree of operating leverage

A

Contribution margin / net income

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Q

Net income

A

contribution margin - fixed expenses

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Q

Percentage increase in net income

A

degree of operating leverage x % change in sales

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