0
Contribution margin is equal to fixed costs minus variable costs?
Wiki User
∙ 13y ago
No... The contribution margin is the dollar amount of each unit of output that is available first to cover fixed costs and then to contribute to profit.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
What is the breakeven of a fixed cost equal 300000 the price per unit equals 10 and the variable cost per unit equals 7?
Fixed cost = 300000 Contribution margin ratio = (sales - variable cost) / sales Contribution margin ratio = (10 - 7 ) / 10 Contribution margin ratio = .3 breakeven point = 300000 / .3 = 1000000
What is happening to average variable costs when they equal marginal costs?
When average variable costs equal to the average marginal cost, the average variable cost will be at the minimum point. i.e. lowest cost
What are total cost of production examples?
In a perfectly competitive market, all n firms are equal. Thus, the market total cost is the total cost (TC) of one firm multiplied by the amount of n firms in the market Total Market Cost =Variable Costs and fixed costs ...Fixed costs plus variable costs.
At what point would total cost equal fixed cost?
When the firm is not producing any goods. Fixed costs like rent and utilities would remain present and constant, but variable costs such as raw materials and other factors of production would cease.
The break even point is the point where total contribution margin equal total fixed cost?
Yes breakven point helps the management to find out that point so that they know how much units of product must be sold to at least recover the initial cost of production.
Does contribution margin equal Sales-variable costs?
Contribution margin is computed as sales revenue minus variable expenses
How do you calculate transfer pricing?
The transfer price should be equal to the variable costs of the goods or services, plus the contribution margin per unit that is lost. =variable costs+(selling price-variable costs)
What is an example of the contribution margin?
For example, if the per-unit variable cost is $15 and selling price per unit is $20, then the contribution margin is equal to $5. The contribution margin may provide a $5 contribution toward the reduction of fixed costs or a $5 contribution to profits.
Produce 60000 variable costs equal 50 percent fixed costs total 120000 what price stero sold to achieve EBIT of 95000?
Breakeven point = Fixed cost + EBIT / contribution margin ratio Contribution margin ratio = sales price - variable cost Contribution margin ratio = 1 - 0.5 = 0.5 or 50% Breakeven point = 215000 / .5 = 430000
What is the break even sales in units if a firm sells units at 40 each variable costs per unit are 10 and total fixed costs equal 120000?
To determine the break even sales in units, divide total fixed costs by the contribution margin per unit. Contribution margin per unit equals sales price less variable costs. Here, contribution margin per unit equals $30 each (i.e. $40 less $10). Total fixed costs equal $120,000. Therefore, the break even sales in units would equal $120,000 / $30 or 40,000 units.
The margin of safety is equal to?
a. sales-net operation incomeb. sales-(variable expenses/contribution margin)c. sales-(fixed expenses/contribution margin ratio)d. sales-(variable expenses + fixed expenses)
What is the break even in units if a firm sells 20000 units at 40 each variable costs per unit are 10 and total fixed costs equal 120000?
1. Breakeven point = fixed cost/ contribution margin ratio contribution margin ratio: (sales - variable cost)/sales Sales = 20000 * 40 = 800000 Less: Variable cost = 20000 * 10 = 200000 Contribution margin = 600000 Contribution margin ratio = 600000/800000 = .75 Breakeven point in dollars = 120000/.75 = $160000 breakeven point in units = 160000 / 40 = 4000
What is the breakeven of a fixed cost equal 300000 the price per unit equals 10 and the variable cost per unit equals 7?
Fixed cost = 300000 Contribution margin ratio = (sales - variable cost) / sales Contribution margin ratio = (10 - 7 ) / 10 Contribution margin ratio = .3 breakeven point = 300000 / .3 = 1000000
What is happening to average variable costs when they equal marginal costs?
When average variable costs equal to the average marginal cost, the average variable cost will be at the minimum point. i.e. lowest cost
Can total revenues and total variable costs be exactly equal?
Yes. Actually this means the company has zero gross profit. If on top of variable costs, there are fixed costs, the company will turn a loss.
What effects the gross profit?
Gross profit or gross margin is equal to:Sales less: Costs of Goods Sold
What is margin of profit?
Gross profit or gross margin is equal to:Sales less: Costs of Goods SoldIt can be expressed as a numerical value or as a percentage of sales [(Sales-COS)/Sales].
