General Business ACC212 Chapter Notes - Chapter 6: Contribution Margin, Fixed Cost, Earnings Before Interest And Taxes
29 Nov 2017
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Contribution margin is sales revenue less variable expenses. sales revenue less fixed and variable expenses. fixed expenses less variable expenses. sales revenue less cost of goods sold. Break-even analysis is the process of finding the break-even point. Graphic presentation: a cost-volume-profit (cvp) graph shows costs, volume, and profits, to construct a cvp graph, Net operating income divided by contribution margin per unit. Fixed costs divided by contribution margin per unit. Net operating income divided by contribution margin ratio. Using the contribution margin approach and the vargo video data: Margin of safety: difference between actual or expected sales and sales at the break, may be expressed in dollars or as a ratio even point. To determine the margin of safety in dollars for vargo video, assuming that actual (expected) sales are ,000: Calculated by dividing the margin of safety in dollars by the actual or expected sales (using vargo video data)
