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Contribution Margin = Sales - Variable Cost Sales Less:Variable Cost Contribution Margin Less:Fixed Cost Net profit(Loss)
Formula for Breakeven point: Breakeven point = Fixed Cost / Contribution margin ratio Contribution margin ratio = Sales / contribution margin Contribution margin = sales - variable cost
sales-variable coste= contribution margin
contribution margin = sales - variable cost
Break even point = Fixed cost / Contribution margin ratio Contribution margin ratio = (sales - variable cost ) / Sales
sales-variable cost= contribution
Formula for contribution margin ratio = Sales
contribution margin ratio = (sales - variable costs) / Sales
Contribution Margin = Sales - Variable Cost Sales Less:Variable Cost Contribution Margin Less:Fixed Cost Net profit(Loss)
Formula for Breakeven point: Breakeven point = Fixed Cost / Contribution margin ratio Contribution margin ratio = Sales / contribution margin Contribution margin = sales - variable cost
sales-variable coste= contribution margin
contribution margin = sales - variable cost
Formula for contribution margin ratio = Sales – Variable cost / Sales
Break even point = Fixed cost / Contribution margin ratio Contribution margin ratio = (sales - variable cost ) / Sales
Contribution margin is computed as sales revenue minus variable expenses
Contribution margin per unit = Contribution margin / number of units of products Contribution margin ratio = Contribution margin / Net sales The formula is different for both situations because contribution margin per unit calculates the contribution margin for one unit of product while contribution margin ratio calculates the contribution margin for total overall sales as overall sales may be included different mix of products with diff rent fixed and variable costs that's why both of these are calculated separately
The activity level at the break even point = fixed expenses/unit contribution margin Dollar sales at the break even point = fixed expenses/contribution margin ratio contribution margin ratio = contribution margin/sales