Chapter 5

Sales revenue (Sales per unit × sales unit)

(-) variable cost
Contribution margin (Sales per Unit – VC per units)
(-) fixed cost
= Net operating income.
Net operating income

 CM per unit = Sales per unit – VC per unit

CM per unit
 CM ratio =
sales per unit
VC Per unit
 VC ratio =
sales per unit

 BEP Q (Equitation Method) = (CM per unit * Q) – fixed cost

 BEP dollar (Equitation Method) = Profit= CM Ratio × Sales- Fixed Cost
¿ Cost
 BEP Q (Formula) =
CM per unit
¿ Cost
 BEP dollar (Formula) =
CM Ratio

Profit = (CM per unit * Q) – fixed cost

¿ cost+ Target profit
Target Profit units =
CM per units
Target profit dollar = Target profit unit × sales per unit
Profit = CM ratio * sales – change in fixed cost

 MOS units = actual sales units – BEP sales units

 MOS dollar = Actual sales dollar – BEP dollar
 MOS percentage = MOS dollar / actual sales dollar × 100

 DOL = total contribution margin / net operating income

 % change in profit = % change in sales * DOL