Formulas
Contribution Margin Formula
What is Net sales revenue - Variable costs?
A company is analyzing internal reports to help managers make decisions about pricing and costs. This type of accounting is being used.
What is Managerial Accounting?
The Ski Company has a Beginning Finished Goods Inventory of $37,000 and a Cost of Goods Manufactured of $234,700. What is the cost of goods available for sale?
What is $271,700 ?
Margin of Safety in UNITS formula
What is Expected sales - Breakeven Sales ?
The company separates its costs into those that change with sales and those that do not. This classification is known as cost ______.
What is cost behavior?
A corporation used $32,000 of direct materials. It incurred $61,000 in direct labor costs and $123,600 in manufacturing overhead costs during the period. What is the cost of goods manufactured if the beginning and ending Work-in-Process Inventories were $26,000 and $22,000, respectively?
What is $220,600 ?
Contribution Margin ÷ Operating Income
What is the formula for Operating Leverage?
The amount remaining after subtracting variable costs from sales revenue, used to cover fixed costs, is called this.
What is the contribution margin?
Henry’s Company manufactures guitars which it sells for $150 each. Variable costs for each unit are $80 and total fixed costs are $11,500. How many units must be sold to earn an income of $7,500?
What is 272 units?
Operating Income ÷ Contribution Margin
What is the formula for Break Even in Units?
The sales level at which the company earns zero profit and zero loss is known as this point.
What is the break-even point?
Sales Price Per Unit: $40
Variable Cost Per Unit: 9
Fixed Costs Per Month: $7 700
What are the required sales in units and dollars for Paige to break even? (Round the answer UP to the nearest whole unit.)
What is 249 units and $9,960 ?
Contribution Margin Ratio Approach for Break Even Sales/ Required sales in Dollars
What is (Fixed Costs + Target Profit) ÷ Contribution Margin Ratio
Managers use a “what-if” approach to see how changes in price, cost, or volume affect profit. This is called ______ analysis.
What is sensitivity analysis?
Bailey's Bakery sells 3 large cupcakes for every one small one. A small muffin sells for $2.50 with a variable cost of $1.00. A large muffin sells for $6.00 with a variable cost of $2.00. Fixed costs are $3,700. How many large and small cupcakes need to be sold to break even? (Round final answer to the nearest whole number of cupcakes.)
What is 823 Large cupcakes and 274 Small cupcakes ?