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Fill-in-the-Blank Equations = Difference in Total Cost Difference in Units Produced = Total Costs (Variable Cost per Unit Units Produced) Contribution Margin = Sales Contribution
Fill-in-the-Blank Equations
- = Difference in Total Cost Difference in Units Produced
- = Total Costs (Variable Cost per Unit Units Produced)
- Contribution Margin = Sales
- Contribution Margin Ratio = Sales
- Change in Operating Income = Contribution Margin Ratio
- = Sales Price per Unit Variable Cost per Unit
- Change in Operating Income = Unit Contribution Margin
- = Fixed Costs Unit Contribution Margin
- Break-Even Sales (dollars) = Fixed Costs
- Sales (units) = ( + Target Profit) Unit Contribution Margin
- Sales (dollars) = (Fixed Costs + Target Profit)
- Operating Leverage = Contribution Margin
- = Percent Change in Sales Operating Leverage
- Margin of Safety (percent of current sales) = (Sales Sales at Break-Even Point)
- Margin of Safety (dollars) = Sales (dollars)
- Margin of Safety (units) = Break-Even Sales (units)
- During 20Y5, Cards by Shannon sold 50,000 finished products with a contribution margin of 55%. The variable costs totaled $40,500 for the year. Determine the sales, contribution margin, and unit contribution margin.
- A new manufacturing company would like to know the sales needed to break even for the first year of operations. The expected total fixed costs will be $27,000 for 15,000 units. The company expects to sell the units for $10 each and incur variable cost of $4 per unit. Determine the break-even sales point in dollars and units.
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