Chapter 5 Cost-Volume-Profit Relationships

What is the Contribution income statement?

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What is the gross profit ratio?_____________________________________________

What is the contribution margin ratio?______________________________________

What is the break-even point?_____________________________________________

Give 3 ways of stating breakeven: (relating items from the contribution income statement)

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What is the formula to find the breakeven number of units?____________________________

How can you determine the number of units necessary to attain a certain level of profit?

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How can you determine total sales at the breakeven point?_____________________________

What is a fixed cost?_____________________________________________________________

How does a fixed cost behave in total?______________________________________________

How does a fixed cost behave per unit?______________________________________________

What is a variable cost?___________________________________________________________

How do variable costs behave in total?_______________________________________________

How do variable costs behave per unit?_______________________________________________

What is margin of safety?__________________________________________________________

Chapter 5 Cost-Volume-Profit Relationships

The dashed lines indicate a "Fill in the blank" area

1) What is the Contribution income statement?

__________________________

__________________________

__________________________

__________________________

__________________________

2) What is the gross profit ratio?_____________________________________________

3) What is the contribution margin ratio?______________________________________

4) What is the break-even point?_____________________________________________

5) Give 3 ways of stating breakeven: (relating items from the contribution income statement)

_____________________________

_____________________________

_____________________________

6) What is the formula to find the breakeven number of units?____________________________

7) How can you determine the number of units necessary to attain a certain level of profit?

_____________________________________________________________________________

8) How can you determine total sales at the breakeven point?_____________________________

9) What is a fixed cost?_____________________________________________________________

10) How does a fixed cost behave in total?______________________________________________

11) How does a fixed cost behave per unit?______________________________________________

12) What is a variable cost?___________________________________________________________

13) How do variable costs behave in total?_______________________________________________

17) How do variable costs behave per unit?_______________________________________________

18) What is margin of safety?__________________________________________________________