Lecture 4 - Costume-Profit-Volume-Analysis Flashcards

1
Q

Contribution =

A

Sales revenue - Variable costs

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2
Q

The profit-Volume calculation is….

A

Contribution/Sales

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3
Q

Margin of safety indicates….

A

How much sales may decrease before a loss occurs

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4
Q

Margin of safety as a ratio:

A
  • Expected sales - breakeven sales/Expected sales

- Actual sales - Breakeven sales/Actual sales

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