Topic 7 - Breakeven analysis and contribution

Question 1

Breakeven point

Answer 1

(Total fixed costs/ contribution per unit)

number of units to cover fixed costs

Question 2

Contribution ratio

Answer 2

(Contribution per unit/ sales price per unit) x 100%

Question 3

Breakeven revenue

Answer 3

(Fixed costs/ contribution ratio) or Breakeven point x sales prices

Question 4

Sales volume to achieve target profit

Answer 4

(Fixed costs + required profit)/ Contribution per unit