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13 Cards in this Set
- Front
- Back
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Contribution Margin
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Sales-VE
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BE Volume
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FE/CM
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BE Units
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FE/CM Per Unit
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CM Ratio
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(sales-VE)/Sales
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BE Sales $
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FE/CM Ratio
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Profit
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Sales-VE-FE
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BE Ticket sales per month when BE profit = 0
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(Unit sales price*sales volume in units)-(Unit VE*sales volume in units)-FE=0
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# sales units required to earn target profit
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(FE+Target net profit)/CM per unit
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$ Sales required to earn target net profit
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(FE+Target net profit)/CM Ratio
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Margin of Safety
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Sales - BE sales $
Calculation = 3 steps 1)CM Ratio (sales-VE)/sales 2) BE sales $ = FE/CM Ratio 3) Margin of safety = Sales-BE sales $ |
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Degree Operating leverage
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CM/NI
(Sales-VE)/(S-VE-FE) |
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Target Net Profit
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[(Unit Sales price)*(Sales volume required to earn target net profit)]-[(unit VE)*(Sales volume required to earn target net profit)]-(FE)
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Operating Leverage of a company is always changing as you use differnt rations.
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Some fixed costs start to have less impact cuz more units use up fixed cost capicity
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