Costing

Question 1

Break even: required sales (units)

Answer 1

Required contribution (fixed costs) / Contribution per unit (sales less variable costs)

Question 2

Break even: required sales (£)

Answer 2

Required contribution (fixed costs) / contribution:sales ratio

Question 3

Margin of safety (£)

Answer 3

Total budgeted (or actual) sales - break even point

Question 4

Margin of safety (%)

Answer 4

Margin of safety (£) / Total budgeted (actual) sales

Question 5

Target profit: Required sales (units)

Answer 5

(Required contribution (fixed cost) + Profit) / Contribution per unit