MA Cost Volume Profit Analysis

Question 1

Formula (In full. Not just Total Revenue - Total Cost)

Profit =

Answer 1

Profit = (Sales Revenue x Qty) - (Fixed cost + (Variable cost * Qty)

Question 2

Break Even Sales Quantity, Q =

Answer 2

FC / (SP - VC) or FC / (CM per unit)

Question 3

Operating Income / Profit =

Answer 3

CM - FC

Question 4

Contribution Margin = _____ + _____

Answer 4

FC + Profit

Question 5

Contribution Margin Ratio (CMR) =

Answer 5

CM / Sale

Question 6

Variable Cost Ratio (VCR) =

Answer 6

VC/ Sales

Question 7

Using VCR to find CMR:

CMR =

Answer 7

1 - VCR (in decimals) or 100% - VCR (in percentage)

Question 8

Using VCR to compute BE:
At breakeven point

BE sales =

Answer 8

FC/ CMR

OR

FC / 1- VCR

Question 9

Using sales:

BE % =

Answer 9

BE Sales / Total Sales

Question 10

Don’t use MOS:
BE Sales =

Answer 10

FC / CMR

Or FC * (Total Sales / Total CM)

Question 11

Using Total CM:

BE% =

Answer 11

FC / Total CM

Question 12

Using sales:
Margin of Safety =

Answer 12

Sales - BE Sales

Question 13

Margin of Safety % =

Answer 13

Margin of safety ($ or Units) / Sales ( $ or Units)

Question 14

Using DOL:
MOS % =

Answer 14

1 / DOL

Question 15

DOL =

Answer 15

Total CM / Operating Profit

Question 16

% Change in Operating Income =

Answer 16

DOL * % change in Sales Qty

Question 17

remove question

Answer 17

a