BUS 202 Lecture Notes - Lecture 11: Contribution Margin, Net Income, Fixed Cost
Document Summary
V * q + f = total cost. P * q -( v*q + f) (50 * 100) - (8 *50) -1000 = 3600. P * q - v * q = sales - variable expense. How much revenue we have to cover our fixed costs. Cm > f = d * total cost > 0. Cm < f = total cost < 0. Ex: cm = p * q - v * q. Tr = tc is known as the breakeven point (be) If we sell 10 less units how much is our profit going to change. Per unit cm = * 10 = ,000. 00. 250 * qbe = 35,000 + (0 * 0) Percent of sales which go to our contribution margin. Cm / sales = (p * q - v * q) / (p * q) Variable exp ratio + v/p or (v * q) / (p * q)
