Week 9 - Cost Volume Profit Analysis IV Flashcards
1
Q
What is the first way break even can be defined?
A
The point where total sales revenue equals total expenses (variable AND fixed)
2
Q
What is the second way break even can be defined?
A
The point where total contribution equals total fixed expenses
3
Q
What is the formula for the equation method?
A
Sales = Variable expenses + Fixed expenses + Profit
4
Q
What is the formula for the contribution margin method in units sold?
A
Break-even point in units sold = fixed expenses / contribution per unit
5
Q
What is the formula for the contribution margin method in total sales sterling?
A
Break-even point in total sales sterling = fixed expenses / CM
