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