Cost Volume Profit Analysis Flashcards
What is the calculation for CPU
Sales revenue per unit less variable cost per unit
What does contribution go towards
Covering fixed costs. Then if there is any excess it contributes towards profit
When does break even occur
When our total contribution for all units sold equals the fixed cost
Break even point in units equals
Fixed costs over contribution per unit
What is margin of safety
The amount by which the planned volume of output exceeds the break even point
How can the margin of safety be expressed
As a number of units or percentage
How do you express margin of safety in a percentage
(Units)margin of safety divided by expected volume of sales (units)
How is profit calculated
Total contribution less fixed cost
How is the number of units to sell to make a target profit calculated
Fixed costs plus target profit divided by CPU
