Class Notes 2 - Contribution margin income...

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Class Notes 2/3 Hot dogs vc= $3 Selling price= $5 CM= $2 CM %= 40% Contribution margin- funds available to pay fixed costs. Break even point- level of output needed to cover fixed costs. Fixed costs/cm %= break even point in $ Fixed costs/ unit cm= break even in units Selling price= 20 Variable costs= 15 Fixed cost= 500 Cm= 5 Cm%= 25% BE$= 2000 BE units= 100 Break even point occurs when economic profit is 0.
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Unformatted text preview: Contribution margin income statement-divides costs based on behavior- variable and fixed components-important subtotal is contribution margin Target income in units= fixed costs plus target income/ (price- variable cost per unit) Target income in $= fixed costs+ target income/ cm %...
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