Week 2 formulas (Cost-Volume-Profit)

Question 1

total contribution margin equation ?

Answer 1

total contribution margin =
sales revenue - variable costs

Question 2

contribution margin per unit equation ?

Answer 2

contribution margin per unit =
selling price per unit - variable costs per unit

Question 3

contribution margin ratio equation ?

Answer 3

contribution margin ratio =
contribution margin / sales revenue
or
cm per unit / selling price per unit

Question 4

breakeven point equation ?

Answer 4

break even point =
sales = variable costs + fixed costs

Question 5

sales revenue equation ?

Answer 5

sales revenue =
selling price per unit * # of units

Question 6

variable costs equation ?

Answer 6

variable costs =
variable cost per unit * # of units

Question 7

variable costs ration equation ?

Answer 7

variable costs ratio =
variable costs / sales revenue
or
variable cost per unit / selling price per unit

Question 8

margin of safety equation ?

Answer 8

margin of safety =
actual sales revenue - break even sales revenue

Question 9

degree of operating leverage equation ?

Answer 9

degree of operating leverage =
contribution margin / net income

Question 10

package of contribution margin per unit equation ?

Answer 10

package of contribution margin per unit =
(products contribution margin per unit * its sales mix #) + (products contirbution margin per unit * its sales mix #)