5 : CONTRIBUTION MARGIN RATIO

What percentage is SALES RATIO?

100%

What is the equation to calculate PROFIT with CONTRIBUTION MARGIN RATIO?

(Contribution margin ratio x sales) - fixed expenses

What is the equation for CONTRIBUTION MARGIN RATIO?

Contribution margin / sales

A ratio computed by dividing CONTRIBUTION MARGIN by sales.

Contribution margin ratio (CM ratio)

What is the FIRST equation for VARIABLE EXPENSE RATIO? HINT: SALES RATIO is 100%.

Sales ratio - contribution margin ratio

An analytical approach that focuses only on those COSTS and REVENUES that change as a result of a decision.

Incremental analysis

What is another equation for CONTRIBUTION MARGIN RATIO?

Unit contribution margin / unit sales price

What is THIRD equation for VARIABLE EXPENSE RATIO?

Unit variable expenses / unit sales price

What is the SECOND equation for VARIABLE EXPENSES RATIO?

Variable expenses / sales