Module 3 - Contribution Flashcards
Margin of safety (%)
(Units sold - break-even units) / units sold
Break even units
Fixed costs / contribution per unit
Break-even revenue
Fixed costs / (C/S ratio)
What is the C/S ratio?
Contribution to sales ratio
C/S ratio
Contribution per unit / sales price per unit
Total fixed production cost
Cost of sales - variable production cost
Fixed non-production costs
Total non-production cost - variable non-production cost
Price which can be paid for materials
Current profit + current amount paid for materials
Price which can be paid for labour
Current profit + current amount paid for labour
Required contribution
Required profit + fixed costs
Margin of safety (in units)
Margin of safety (in £)
Units sold - break even units
Sales revenue - break even revenue
Margin of safety as a %
(Units sold - break-even units) / units sold
OR
(Sales revenue - break even revenue) / sales revenue
Variable elements of Cost of Sales
Increase in cost of sales / increase in number of units
Required units to be sold to achieve profit level
Required total contribution / contribution per unit
Sales volume contribution variance
(Budgeted units sold - actual units sold) X standard contribution per unit
