ACC 203 - CH 18 Formulas

Variable cost per unit

Change in cost ÷ Change in units

Contribution margin per unit

Selling price per unit ÷ Variable costs per unit

Contribution margin ratio

Contribution margin per unit ÷ Selling price per unit

&/ OR

Contribution margin ÷ Sales

Margin of safety in percent

(Expected sales - Break even sales) ÷ Expected sales

Dollar sales at target income

(Fixed costs + Target income) ÷ Contribution margin ratio

Unit sales at target income

(Fixed costs + Target income) ÷ Contribution margin per unit

Break-even point in Units

Total fixed costs ÷ contribution margin per unit

Weighted average Contribution margin per unit

Contribution margin per unit for each product x Sales mix percent for each product

Break even point in Units (Multiple products)

Fixed costs ÷ Weighted average Contribution margin per unit

Margin of Safety 

Expected sales - Break break even sales

Break even point in dollars

total fixed costs ÷ contribution margin ratio

Required Sales for Target Income

(Fixed costs + Target income) ÷ Contribution margin Ratio

Required Units for Target Income

(Fixed costs + Target income) ÷ Contribution margin per unit