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18 Cards in this Set
- Front
- Back
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Profit =
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(Price - Variable costs) x Units of output - Fixed costs
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Unit Contribution Margin
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Price - Variable cost per unit
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Contribution Margin Ratio
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Unit Contribution Margin / Sales Price Per Unit
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Break Even Volume
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Fixed Costs / Contribution Margin
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Break-even volume (sales dollars)
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Fixed Costs / Contribution Margin Ratio
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Target Volume in Units
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Fixed Costs + Target Profit/Contribution Margin per Unit
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Target Volume in Sales Dollars
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Fixed Costs + Target Profit/ Contribution Margin Ratio
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Margin of Safety
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Sales Volume - Break even sales volume
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Operating Leverage
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cost structure is made up of fixed costs. once breakeven is reached, profits increase at a high rate
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Income Taxes finding the Target Volume in Units
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Fixed Costs + {Target profit/(1-Tax rate)} / Unit contribution margin
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Income Taxes finding the Target Volume in
Dollars |
Fixed Costs + {Target profit/(1-Tax rate)} / Contribution Margin Ratio
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Weighed Average Contribution Margin
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product 1 weighted for mix (ie 90%) and its contribution margin + product 2 weighted for mix (ie 10%) and its contribution margin
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Contribution Margin Ratio
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Contribution margin as a percentage of sales revenue.
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Operating Leverage
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Extent to which an organization's cost structure is made up of fixed costs.
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Break-even point
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Volume at which profits equal zero
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Margin of Safety percentage
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Excess of projected or actual sales over the break even volume expressed as a percentage of sales volume
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A set product mix - to find units weighted contribution margin
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Divide fixed costs by weighted avg contribution margin to find units to break even, then multiply by ratios.
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A set product mix - to find dollars weighted contribution margin
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1st find wtd avg contribution margin ratio: divide wtd avg contribution margin by wtd avg revenue
then divide fixed costs by weighted avg contribution margin ratio |
