Break+Even+Summary


 * Cost-volume-profit (CVP)** analysis looks at how profit changes when there are changes in variable costs, sales price, fixed costs and quantity.


 * Formulae to learn**

Contribution per unit = sales price per unit less variable cost per unit

Break-even volume = Fixed overhead / Contribution per unit


 * The contribution to sales ratio (C/S ratio)**

C/S ratio = Contribution per unit / Sales price per unit

C/S ratio = Total contribution / Total sales revenue

Break-even revenue = Fixed overhead /( C/S ratio)

Margin of safety (units) = Budgeted sales volume less Break-even sales volume

Margin of safety (%) = ((Budgeted sales less Break-even sales volume )x 100 ) / Budgeted sales volume

Number of units sold to achieve a target profit = (Fixed cost + Target profit ) / Contribution per unit