Ch. 5 Flashcards
(15 cards)
1
Q
Profit
A
(Unit CM * Q) - fixed expenses
2
Q
CM Ratio
A
CM/sales
3
Q
Change in CM Ratio
A
CM ratio * change in sales
4
Q
Profit
A
(CM ratio * sales) - fixed expenses
5
Q
Change in Profit
A
(CM ratio * change in sales) - fixed expenses
6
Q
Var. Expense Ratio
A
Var exp/sales
7
Q
CM & Var. Expenses
A
CM ratio = 1 - var. expense ratio
8
Q
Break-Even in Unit Sales
A
Fixed expense/unit CM
9
Q
Break-Even in Dollar Sales
A
Fixed expenses/CM ratio
10
Q
Units for Target Profit
A
(Target profit + fixed expenses)/unit cm
11
Q
MOS in dollars
A
total sales - break-even sales
12
Q
MOS %
A
MOS in dollars/(total sales in dollars)
13
Q
Degree of Operating Leverage
A
CM/NOI
14
Q
% Change in Operating Income
A
Degree of operating leverage * % in sales
15
Q
Target Profit
A
(Selling price - variable costs) * quantity - fixed costs
