Chapter 19
Variable Costs:
Number of Units× Direct MaterialCosts per unit =Total Direct Material Cost
Mixed Cost:
Mixed Cost =¿ Cost +Variable Cost
High-Low Method:
△y
m=
△x
Difference∈Total Cost
Variable Cost per Unit=
Difference∈Units Produced
Estimating Fixed Cost:
¿ Cost =Total Cost −(Variable Cost per Unit ×Units Produced )
Contribution Margin:
Contribution Margin=Sales−Variable Costs
Contribution Margin Ratio:
Sales−VC
Contribution Margin Ratio=
Sales
Unit Contribution Margin
Contribution Margin Ratio=
Unit Selling Price
Change in Income from Operations (Monetary):
Change∈Income ¿Operations=Change∈Sales Dollars ×Contribution Margin Ratio
Unit Contribution Margin:
Unit Contribution Margin=Sales Price per Unit −Variable Cost per Unit
Change in Income from Operations (Units):
Change∈Income ¿Operations=Changes∈Sales Units× Unit Contribution Margin
Break-Even Sales (Units):
¿ Costs
Break Even Sales(Units)=
Unit Contribution Margin
Q∗( P−CMU )=FC + I
Break-Even Sales (Monetary):
¿ Cost
Break Even Sales(Monetary )=
Contribution Margin Ratio
Target Profit:
¿ Costs+Target Profit
Sales(Units)=
Unit Contribution Margin
Break-Even Sales (Units) for Product E (Sales Mix):
¿ Costs
Break Even Sales(Units)=
Unit Contribution Margin
Operating Leverage:
Contribution Margin
Operating Leverage = Operations ¿
Income ¿
Percent Change in Income from Operations:
% △ ∈ Income ¿ Operations=% △ ∈Sales ×Operating Leverage
Margin of Safety:
Sales−Sales at Break Even Point
Margin of Safety=
Sales
Variable Costs:
Number of Units× Direct MaterialCosts per unit =Total Direct Material Cost
Mixed Cost:
Mixed Cost =¿ Cost +Variable Cost
High-Low Method:
△y
m=
△x
Difference∈Total Cost
Variable Cost per Unit=
Difference∈Units Produced
Estimating Fixed Cost:
¿ Cost =Total Cost −(Variable Cost per Unit ×Units Produced )
Contribution Margin:
Contribution Margin=Sales−Variable Costs
Contribution Margin Ratio:
Sales−VC
Contribution Margin Ratio=
Sales
Unit Contribution Margin
Contribution Margin Ratio=
Unit Selling Price
Change in Income from Operations (Monetary):
Change∈Income ¿Operations=Change∈Sales Dollars ×Contribution Margin Ratio
Unit Contribution Margin:
Unit Contribution Margin=Sales Price per Unit −Variable Cost per Unit
Change in Income from Operations (Units):
Change∈Income ¿Operations=Changes∈Sales Units× Unit Contribution Margin
Break-Even Sales (Units):
¿ Costs
Break Even Sales(Units)=
Unit Contribution Margin
Q∗( P−CMU )=FC + I
Break-Even Sales (Monetary):
¿ Cost
Break Even Sales(Monetary )=
Contribution Margin Ratio
Target Profit:
¿ Costs+Target Profit
Sales(Units)=
Unit Contribution Margin
Break-Even Sales (Units) for Product E (Sales Mix):
¿ Costs
Break Even Sales(Units)=
Unit Contribution Margin
Operating Leverage:
Contribution Margin
Operating Leverage = Operations ¿
Income ¿
Percent Change in Income from Operations:
% △ ∈ Income ¿ Operations=% △ ∈Sales ×Operating Leverage
Margin of Safety:
Sales−Sales at Break Even Point
Margin of Safety=
Sales
