Cost Management and Break-Even Analysis

These flashcards cover key concepts related to cost management, break-even analysis, and various financial performance metrics.

CM Ratio

Contribution Margin/Sales.

Variable Expense Ratio

Variable expenses/Sales.

Breakeven in Units

Total fixed expenses/unit Contribution Margin.

Breakeven in Sales

Total fixed expenses/CM Ratio.

Units sold to attain target profit

Fixed expenses + (target after tax profit/ 1 - tax rate)/unit Contribution Margin.

Sales to attain target profit

Fixed expenses + (target after tax profit/1 minus tax rate)/CM Ratio.

Margin of Safety

Total sales - breakeven sales.

Percentage Margin of Safety

Margin of safety/total sales.

Degree of Operating Income

Contribution Margin/Income.

% Change in Operating Income

degree of operating income x % change in sales

POHR

Total Manufacturing Overhead Cost/Units in allocation base.

QV

AQ(AP-SP).

LRV

AQ(AP-SP).

VOSV

AQ(AP-SP).

PV

SP(AQ-SQ).

LEV

SP(AQ-SQ).

VOEV

SP(AQ-SQ).

ROI

operating income/average operating assets