ACCTG 222 Chapter 4 Formulas

Total Revenue

unit selling price x # of units sold

Total Costs

Fixed costs + (unit variable costs x # of units sold)

Contribution Margin (CM)

sales - variable costs

CM per unit

selling price per unit - variable cost per unit

CM ratio

CM per unit / selling $ per unit

BE in units

fixed costs / CM per unit

BE in sales $

fixed costs / CM ratio

MOS in sales $

total sales - BE sales $

MOS in units

unit sales - unit BE sales

MOS Ratio

MOS / sales OR MOS in units / sales units

Target Operating Profit in units

(fixed costs + target operating profit) / CM per unit

Target Operating Profit in sales $

(fixed costs + target operating profit) / CM ratio

Before-Tax OP in units

(FC + target after tax OP / (1-t)) / CM per unit

After-Tax OP in units

(FC + target before tax OP x (1-t)) / CM per unit

Before-Tax OP in sales $

(FC + target after tax OP / (1-t)) / CM ratio

After-Tax OP in sales $

(FC + target before tax OP x (1-t)) / CM ratio

Degree of Leverage

CM / pre-tax operating income

% change in pre-tax OP

DOL x % change in sales