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11 Cards in this Set
- Front
- Back
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Sales Mix Formula |
Product 1 Units Sold / Total Units Sold |
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Weighted-average contribution margin |
(Unit Contribution Margin 1 x Sales Mix % 1) + (Unit Contribution Margin 2 x Sales Mix % 2) |
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Weighted-Average Contribution Margin Ratio |
(Contribution Margin Ratio 1 x Sales Mix % 1) + (Contribution Margin Ratio 2 x Sales Mix % 2) |
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Break-even Point in Units for multiple products |
Fixed Costs / Weighted-Average Unit Contribution Margin |
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Break-even Point in Dollars for multiple products |
Fixed Costs / Weighted-Average Contribution Margin Ratio |
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Contribution Margin per unit of Limited Resource |
Contribution margin per unit / Machine hours required |
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Contribution Margin Ratio using Sales |
Contribution Margin / Sales |
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Cost Structure |
the relative proportion of fixed vs. variable costs that a company incurs |
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Operating Leverage |
Extent that net income reacts to a given change in sales fixed costs > variable costs = higher operating leverage High operating leverage means that profits will increase rapidly while sales revenues increase and vise versa |
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Degree of Operating Leverage Formula |
Contribution Margin / Net Income |
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Degree of Operating Leverage - Definition |
Provides a measure of a company's earnings volatility. Affects a company's break even point |
