cost chapter 5
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Once the break-even point has been reached, net operating income will increase by the amount of the _____ for each additional unit sold.
unit contribution margin
$ sales to break even
Fixed Expenses / CM Ratio
unit sales to break even
Fixed Expenses / Unit CM
unit sales to attain target profit
(Target Profit + Fixed Expenses) / Unit CM
3 ways to get profit equation
(sales-variable expenses)-fixed expenses OR (unit CMxquantity)-fixed expenses OR (CMratioxsales)-fixed expenses
%change in net operating income...
=degree of operating leverage X %change in sales
change in CM
CM ratio x change in sales
CM Ratio
CM/Sales
Degree of Operating Leverage
Contribution Margin / Net Operating Income
CM per unit is...
Price per unit - VC per unit
