CVP ANALYSIS

Contribution Margin I/S FORMULAS:

Sales BREAK-EVEN POINT Units 𝑭𝑪
𝑪𝑴/𝒖𝒏𝒊𝒕
Less: Variable Cost Manuf cost (DM, DL, OH) Pesos 𝑭𝑪
Variable Selling & Admin 𝑪𝑴𝑹𝒂𝒕𝒆 𝑪𝑴 ÷ 𝑺𝒂𝒍𝒆𝒔
Contribution Margin  Sales = TC (VC + FC)
Less: Fixed Cost Fixed Overhead  Profit = 0
Fixed Selling & Admin  CM = FC
Profit (Operating/Net Inc) TARGET PROFIT Units 𝑭𝑪 + 𝑻𝒂𝒓𝒈𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕
𝑪𝑴/𝒖𝒏𝒊𝒕
MARGIN Units 𝑆𝑎𝑙𝑒𝑠 − 𝐵𝐸𝑃 (𝑢𝑛𝑖𝑡𝑠) Pesos 𝑭𝑪 + 𝑻𝒂𝒓𝒈𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕
OF SAFETY Pesos 𝑆𝑎𝑙𝑒𝑠 (𝑝𝑒𝑠𝑜𝑠) − 𝐵𝐸𝑃 (𝑝𝑒𝑠𝑜𝑠) 𝑪𝑴𝑹𝒂𝒕𝒆
Ratio 𝑀𝑜𝑆 ÷ 𝑆𝑎𝑙𝑒𝑠
DEGREE OF 𝑪𝒐𝒏𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 𝑴𝒂𝒓𝒈𝒊𝒏 MULTIPLE PRODUCTS
LEVERAGE 𝑷𝒓𝒐𝒇𝒊𝒕 - Mixed sales
% change in Sales  Effect in Profit - Composite BEP
- Weighted Average Contribution Margin