BUSINESS: UNIT 2: CH 31: BREAK EVEN

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4 Terms

1
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KW contribution per unit (CPU)

the amount of money left over from the sale of a product after variable costs are deducted

price per unit - variable cost

2
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total contribution

CPU x quantity

3
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KW break-even

the point at which a business is nether making a profit nor a loss

total revenue = total costs

fixed costs / CPU

4
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KW margin of safety

number between break-even adn actual sales. it lets the business know how much its sales can drop before making a loss

MOS = current output - break-even output