Closely review the examples of ratio calculations in the chapter text. Also note that examples are presented in visuals as well as text.

Practice Exercise 7–3: Calculating the PV Ratio The profit-volume (PV) ratio is also known as the contribution margin (CM) ratio. Use the same assumptions for the Community Center Mental Health Program. In addition to the contribution margin figures already computed, now compute the PV ratio (also known as the CM ratio).

Assignment Exercise 7–3: Calculating the PV Ratio and the CVP Ratio Use the same assumptions for the Greenside Clinic. One more assumption will be added:

the clinic had 35,000 visits.

Required 1. In addition to the contribution margin figures already computed, now compute the PV ratio (also known as the CM ratio).

2. Add another column to your worksheet and compute the clinic’s per-visit revenue and costs.

3. Create a Cost-Volume-Profit chart. Refer to the chapter text along with Figure 7–6.