ACC 202 Formula

Lance Inc. has a sales of 9,000 units. The contribution margin per unit is $32 and fixed costs total $120,000. Lannces profit is?

$168,000 (9,000 X 32) - 120,000 = $168,000

A company sold 750 units with a contribution margin of $120 per unit. If the company has a break even point of 450 units, the net operating income or loss is?

$36,000 (750-450) X $120 = $36,000

Target profit is $520,000. Each unit has a contribution margin of $21. Fixed cost are $320,000. What is the number of units that must be sold to reach the target profit?

40,000 units ($520,000 + $320,000) / 21 = 40,000 units

A company has reached its break even point when?

Contribution Margin = Fixed Expenses6

How do you calculate the Degree of Operating Leverage?

Contribution Margin/Net Operating Income

What affects the break-even point calculation?

Cost per Unit Sales Mix Selling price per unit

When preparing a CVP graph, the horizontal axis represents what?

Sales volume