ACG 2071 Test 2 Study Guide Questions with
Verified Correct Answers
Contribution Margin (CM) Formula
Sales minus Variable Costs.
CM Per Unit Formula
Selling Price minus Variable Cost per unit.
Contribution Margin Ratio Formula
Contribution Margin divided by Sales.
Break-Even Point Profit Condition
Profit equals $0.
Break-Even Units Formula
Fixed Costs divided by CM per unit.
Break-Even Sales Dollars Formula
Fixed Costs divided by CM Ratio.
Target Profit Units Formula
(Fixed Costs plus Target Profit) divided by CM per unit.
Target Profit Sales Dollars Formula
(Fixed Costs plus Target Profit) divided by CM Ratio.
Margin of Safety Formula (Dollars)
Actual Sales minus Break-even Sales.
Verified Correct Answers
Contribution Margin (CM) Formula
Sales minus Variable Costs.
CM Per Unit Formula
Selling Price minus Variable Cost per unit.
Contribution Margin Ratio Formula
Contribution Margin divided by Sales.
Break-Even Point Profit Condition
Profit equals $0.
Break-Even Units Formula
Fixed Costs divided by CM per unit.
Break-Even Sales Dollars Formula
Fixed Costs divided by CM Ratio.
Target Profit Units Formula
(Fixed Costs plus Target Profit) divided by CM per unit.
Target Profit Sales Dollars Formula
(Fixed Costs plus Target Profit) divided by CM Ratio.
Margin of Safety Formula (Dollars)
Actual Sales minus Break-even Sales.