(CVP) ANALYSIS AND DECISION MAKING The number of units of sale required to break even is known as the breouk even pojpnt The ratio which measures how much coptribution is earned from each $1 of sales is known as the .Salle..........tio.... or Contribution is earned from The difference between the budgeted sales volume (or revenue) and the breakeven sales volume (or revenue) is known as the The total contribution required for a target profit = required profit + Breakeven analysis is a useful technique for managers as it can provide simple and quick estimates. A graphical representation of breakeven arithmetic can be provided by a Future costs, cash flows, incremental costs, differential costs and opportunity costs are all known as costs. A past cost which is not relevant in decision making is known as a In general, when deciding which costs are relevant to a decision, variable costs will be and fixed costs will be to the decision. costs - A factor which limits an organisation's activities is known as a In a make/buy-in problem with no limiting factors, the relevant costs for the decision are the between the two options. - Possible pitfalls Write down the mistakes you know you should avoid