BASIC FORMULAS CVP
ANALYSIS EXAM QUESTIONS
AND ANSWERS
Contribution Margin (CM)
Sales - Variable Costs
Unit CM
Unit Selling Price - Unit Variable Costs
CM Ratio
CM ÷ Sales = Unit CM ÷ Unit Selling Price = Δ CM ÷ Δ
Sales
Break-even Point (BEP) in Units
Fixed Costs ÷ Unit CM
Break-even Point (BEP) in Peso Sales
Fixed Costs ÷ CM Ratio
BEP Ratio
BEP ÷ Sales = 100% - Margin of Safety Ratio
Sales (units) with Target Profit
(Fixed Costs + Target Profit) ÷ Unit CM
Sales (peso sales) with Target Profit
(Fixed Costs + Target Profit) ÷ CM Ratio
Sales (peso sales) with Target Profit Ratio
Fixed Costs ÷ (CM Ratio - Profit Ratio)
Margin of Safety (MS)
Sales - Break-even Sales = Profit ÷ CM Ratio
ANALYSIS EXAM QUESTIONS
AND ANSWERS
Contribution Margin (CM)
Sales - Variable Costs
Unit CM
Unit Selling Price - Unit Variable Costs
CM Ratio
CM ÷ Sales = Unit CM ÷ Unit Selling Price = Δ CM ÷ Δ
Sales
Break-even Point (BEP) in Units
Fixed Costs ÷ Unit CM
Break-even Point (BEP) in Peso Sales
Fixed Costs ÷ CM Ratio
BEP Ratio
BEP ÷ Sales = 100% - Margin of Safety Ratio
Sales (units) with Target Profit
(Fixed Costs + Target Profit) ÷ Unit CM
Sales (peso sales) with Target Profit
(Fixed Costs + Target Profit) ÷ CM Ratio
Sales (peso sales) with Target Profit Ratio
Fixed Costs ÷ (CM Ratio - Profit Ratio)
Margin of Safety (MS)
Sales - Break-even Sales = Profit ÷ CM Ratio