Cost Behavior Formulas

Question 1

Variable Expenses ÷ Sales

Answer 1

Variable Expense Ratio

Question 2

Sales - Variable Expenses

Answer 2

Contribution Margin

Question 3

Contribution Margin ÷ Sales

Answer 3

Contribution Margin Ratio

Question 4

Unit Contribution Margin ÷ Unit Selling Price

Answer 4

Contribution Margin Ratio Per Unit

Question 5

(CM Ratio * Sales) - Fixed Expenses

Answer 5

Profit

Question 6

(Selling Price per Unit - Variable Expenses per Unit) * Quantity - Fixed Expenses

Answer 6

Unit Contribution Margin: Equation Form

Question 7

Contribution Margin ÷ Net Operating Income

Answer 7

Degree of Operating Leverage

Question 7

Fixed Expenses ÷ Unit Contribution Margin

Answer 7

Unit Sales to Break Even

Question 7

Percent Increase in Sales * Degree of Operating Leverage

Answer 7

Percent Increase in Profits

Question 8

Fixed Expenses ÷ Contribution Margin Ratio

Answer 8

Dollar Sales to Break Even

Question 9

Fixed Expenses ÷ CM per Unit

Answer 9

Break Even Sales in Units

Question 10

BE% = (Fixed Expenses ÷ Contribution Margin) * 100%

Answer 10

Break-even: Percentage Method

Question 11

Total Sales - Breakeven Sales

Answer 11

Margin of Safety in Dollars

Question 12

(Target Profit + Fixed Expenses) ÷ CM per Unit

Answer 12

Target Profit Analysis: Unit Sales to Attain Target Profit

Question 13

(FE + Target Profit) ÷ Contribution Margin Ratio

Answer 13

Target Profit Analysis: Dollar Sales to Attain Target Profit

Question 14

(Fixed Expenses + Target Profit) ÷ Contribution Margin

Answer 14

Target Profit Analysis: Percentage Method

Question 15

Net Income ÷ Contribution Margin

Answer 15

Margin of Safety Percentage