ADMS 1500 Chapter Notes - Chapter 6: Contribution Margin, Earnings Before Interest And Taxes, Fixed Cost

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Part a (35 multiple choice questions mix of both calculation and conceptual) ** practice cp, ice, self study question, and assigned question. Cost-volume-profit (cvp) analysis study of effects of changes of costs and volume on a co(cid:373)pa(cid:374)y"s profits. Contribution margin per unit, & in total (unit or total selling price) (unit or total variable costs) Contribution margin ratio (contribution margin per unit) (unit selling price) Per unit: (fixed costs) (contribution margin per unit) Per dollar: (fixed costs) (contribution margin ratio) Ratio: (margin of safety in $) (actual sales) Step 1: calculate the weighted-average unit contribution margin of all the products (p1 unit contribution margin sales mix %) + (p2 contribution margin sales mix %) = Step 2: calculate the break-even point in units: Fixed costs weighted average unit contribution margin = break-even point in unit. Step 1: determine weighted-average unit contribution margin ratio (contribution margin ratio sales mix %) + (contribution margin ratio sales mix %) =

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