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Flashcards in Q2 Deck (4)
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How do you calculate break even sales?

Break even sales= fixed costs *(sales/contribution) where contribution is sales - variable costs


How do you calculate the margin of safety?

Sales - break even sales


How do you calculate the contribution to sales ratio?

(Sales - variable costs)/ sales *100%


How do you calculate the minimum selling price?

Calculate opportunity costs = contribution of old product * (mats of new product/ mats of old product)