4856346
Description
Mind Map by Dana Carpenter, updated more than 1 year ago
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Created by Dana Carpenter
over 8 years ago
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Cost Volume Profit
- Contribution Margin= Sales price minus variable cost
- Breakeven in units= Fixed costs in total/CM per unit
- Breakeven in dollars (monetary equivalent)= Fixed costs in total divided by Contribution margin rate
- Contribution margin ratio (rate) CMR= CM divided by Sales Price
- Variable Cost ratio or rate= VC divided by Sales Price
OR 1- CMR
- Variable Cost ratio or rate= VC divided by Sales Price
OR 1- CMR
- Unit sales needed to earn a desired profit = (Desired profit before tax plus fixed costs)/ CM
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