Revenue (11000 * 110) 1210000
fixed Cost 385500
variable cost 698950 (balance figure)
Operating Income 125550
Variable cost per unit = 698950/11000
variable cost per unit = 63.54
Contribution margin ratio = (Sales - Variable cost) / Sales * 100
Contribution margin ratio = (1210000 - 698950 ) / 1210000
Contribution margin ratio = 0.42 or 42%
sales-variable coste= contribution margin
contribution margin = sales - variable cost
Formula for contribution is as follows: Sales revenue xxxx Less: Variable cost xxxx Contribution margin xxxx
breakeven point (units) = fixed costs/contribution contribution = selling price - variable costs per unit
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
sales-variable cost= contribution
Formula for contribution is as follows: Sales revenue xxxx Less: Variable cost xxxx Contribution margin xxxx
Formula for contribution margin ratio = Sales – Variable cost / Sales
Total variable cost is typically the sum of all variable labor, variable materials, and variable overhead expenses.
Increase in variable cost reduces the contribution margin as following formula suggests”Contribution margin = Sales revenue – Variable Cost
Formula to calculate breakeven point is as follows: Break even point = Fixed cost / contribution margin Contribution margin = Sales - Variable cost
breakeven point (units) = fixed costs/contribution contribution = selling price - variable costs per unit
Contribution margin per unit is calculated by subtracting the variable cost of the item from the selling price of the item.
Formula for Breakeven point: Breakeven point = Fixed Cost / Contribution margin ratio Contribution margin ratio = Sales / contribution margin Contribution margin = sales - variable cost
48%