cob 242 test 3
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9 Terms
contribution margin formula
sales price/item - variable cost/item
contribution margin ratio formula
contribution margin/sales revenue
ways to calculate breakeven point
shortcut approach using unit contribution margin
shortcut approach using contribution margin ratio
breakeven point formula (using unit contribution margin)
fixed expenses + operating income / contribution margin PER UNIT
breakeven point formula (using unit contribution ratio)
sales in dollars = fixed expenses + operating income / contribution margin ratio
if the variable costs increase, what happens to the unit contribution margin?
DECREASES —> volume needed to break even/achieve profit INCREASES
if the variable costs decrease, what happens to the unit contribution margin?
INCREASES —> volume needed to break even/achieve profit DECREASES
sales in total units formula
fixed expenses + operating income / weighted-average contribution margin per unit
weighted-average contribution margin per unit formula
contribution margin / sales mix (total in basket)
