Your roommate asks for your help on the following questions about CVP analysis formulas.

1. How can the mathematical equation for break-even sales show both sales units and sales dollars?

2. How do the formulas differ for contribution margin per unit and contribution margin ratio?

3. How can contribution margin be used to determine break-even sales in units and in dollars?

Instructions:

Write a memo to your roommate stating the relevant formulas and answering each question.