BCOR 2400 Basic Marketing Accounting

BCOR 2400 Basic Marketing Accounting - The Profit Equation...

Info icon This preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
The Profit Equation The Profit Equation Profit = Revenues – Expenses or Profit = Revenues - Costs
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Costs Variable Costs Costs that change as activity levels change. Often times we will talk about unit variable costs. Per unit, variable costs will remain the same unless the change in the number of units produced is large. The total variable costs (quantity * unit variable cost) will change as the units produced change. Fixed Costs Costs that do not change over the short term, or with the level of activity.
Image of page 2
Contribution or Gross Profit Contribution or Gross Profit is found by subtracting all variable expenses from sales revenue. This often is determined per unit, but can also be determined in total. The idea is that what is left “contributes” to covering fixed costs and to profit. Sales Revenue Price Per Unit -Variable Costs -Variable Cost Per Unit Contribution Per Unit Contribution
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Breakeven Analysis Breakeven Quantity = Fixed Costs Unit Price – Unit Variable Cost Breakeven Quantity = Fixed Costs Unit Contribution
Image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern