CVP Analysis Flashcards Preview

Managerial basic equations midterm > CVP Analysis > Flashcards

Flashcards in CVP Analysis Deck (12):
1

Contribution Margin/unit

= unit selling - unit variable
or
= total CM/ Units sold

2

Contribution Margin Ratio

= contribution margin per unit / unit selling price
or
= total CM/ Total sales

3

Variable Cost Ratio

= Variable cost per unit / unit selling price
or
= total VC/total sales

4

Break Even ($)

= total fixed costs ($) / contribution ratio

5

Break Even Units

= total fixed costs ($) / contribution margin per unit

6

Break-even units multiple products

= total fixed costs ($) / Weighted average contribution margin per unit

7

Net income before taxes

= Net income after tax / (1-tax rate)

8

Required sales

= (FC + target NIBT) / CM ratio

9

Degree of Operating leverage

= contribution margin / net income

10

Percentage change in profits

= degree of operating leverage * Percentage change in sales

11

Margin of Safety ($)

= actual (expected) sales ($) - Break even sale ($)

12

Margin of Safety Ratio

= Margin of Safety ($) / Actual (Expected) sales ($)