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ACG 2071 Test 2 Study Guide Questions with Verified Correct Answers

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ACG 2071 Test 2 Study Guide Questions with Verified Correct Answers

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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.

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