Share ACCT4 CVP Formulas
Save to Folder
What is the formula for contribution margin (CM)?
Sales - Variable expenses
Sales - Fixed expenses
Variable expenses - Sales
Net operating income - Variable expenses
What is the formula for contribution margin per unit (unit CM)?
Units sold / CM
Sales / CM
CM / Units sold
CM / Sales
What is the formula for contribution margin ratio (CM ratio)?
Sales / CM
CM / NOI
NOI / CM
CM / Sales
What is the formula for the variable expense ratio?
Sales / Variable expenses
Variable expenses / NOI
NOI / Variable expenses
Variable expenses / Sales
What is the formula for change in total contribution margin?
Unit CM x Changes in sales (units) -or- CM ratio x Change in sales (dollars)
What is the formula for change in NOI (profit)?
(Unit CM x Change in sales (units)) - Change in fixed expenses -or- (CM ratio x Change in sales (dollars)) - Change in fixed expenses
What is the formula for breakeven point (BE) in dollars?
Fixed expenses / CM ratio
Unit CM / Fixed expenses
Fixed expenses / Unit CM
CM ratio / Fixed expenses
What is the formula for breakeven point (BE) in units?
Fixed expenses / Unit CM
Unit CM / Fixed expenses
CM ratio / Fixed expenses
Fixed expenses / CM ratio
What is the formula for target profit (TP) in units?
TP / Unit CM
TP / CM ratio
(TP + Fixed expenses) / Unit CM
(TP + Fixed expenses) / CM ratio
What is the formula for target profit (TP) in dollars?
TP / CM ratio
(TP + Fixed expenses) / Unit CM
TP / Unit CM
(TP + Fixed expenses) / CM ratio
What is the formula for margin of safety (MoS) in dollars?
BE sales - Total budgeted or actual sales
Total budgeted or actual sales / BE sales
BE sales / Total budgeted or actual sales
Total budgeted or actual sales - BE sales
What is the formula for margin of safety (MoS) as a percentage of sales?
MoS ($) / Total budgeted or actual sales
Total budgeted or actual sales / BE sales
Total budgeted or actual sales / MoS ($)
BE sales / Total budgeted or actual sales
What is the formula for degree of operating leverage (DoL)?
CM / Sales
NOI / CM
CM / NOI
Sales / CM
What is the formula for percentage change in NOI due to a percentage change in sales?
Old NOI x DOL
DOL / % change in sales
Old NOI x % change in sales
DOL x % change in sales
You can use the change in NOI (profit) formula only if:
Sales volume and fixed expenses did not change
Selling price or variable expenses did change
Sales volume and/or fixed expenses did change
Unit CM and CM ratio did change
