BUS 108 Lecture Notes - Lecture 4: Unit Price, Variable Cost, Income Tax
Document Summary
Cm contributes to covering fc and then to profit: unit cm = unit price unit vc. Total cm = total sales total variable costs. Cm ratio = total cm / total sales; or unit cm / unit price: applications of cvp concepts. Cvp analysis is typically used to estimate the impact on profit of changes in selling price, vc per unit, total fc, and sales volume. Sales variable costs fixed costs = profits. Sales = variable costs + fixed costs + profits. P x q = v x q + f + profits. Q = (f + profits) / (p v: be point in unit sales and in dollars. Be point in units = (f + 0) / (p v) = f/cm (1) Be point in dollars = (f + 0) / ((p v) / p) = (f + 0) / (1 v/p)
