Management and Organizational Studies 2275A/B Lecture Notes - Lecture 1: Net Income, Cash Flow, Variable Cost

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Ryan Rego

Document Summary

B/e sales $ = fixed costs/contribution margin ratio. Target units = fixed costs + target profit/(selling. Target sales $ = fixed costs + target profit/((sp-vc per unit)/sp) Breakeven sales $ = fixed costs/(weighted avg. contrib margin rate) Rate product 1) x (expected % revenue, product 1) + (contrib. Rate product 2) x (expected % revenue, product 2) = fixed costs/(selling price variable cost per unit) Where weighted average price = (selling price, product 1) x (expected % of units, product 1) + (selling price, product 2) x (expected % of units, product 2) + (selling price product 3) x . Where weighted avg. variable cost = (vc product 1) x (expected % units, product 1) + (vc product 2) x (expected % units, product 2) + (vc product 3) x (expected % units, product 3) and. Contribution rate = (selling price vc (or unit contribution))/selling price. Look at b/s for changes in loans, stock, personal investment.