Formulas+for+chapter+6[1] - 10 Weighted average...

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Formulas for chapter 6 1. Net Income = (Units sold – Break even units) x Contribution margin per unit 2. Contribution Margin Ratio = (Sales-Variable expenses) / Sales 3. Contribution Margin Ratio = (Sales price per unit – Variable cost per unit) / (Sales price per unit) 4. Increase in Sales x Contribution Margin Ratio = Increase in Contribution Margin 5. Increase in Contribution Margin – Increase in Fixed costs = +/- Change in net income 6. Profits = (Sales – Variable expenses) –Fixed expenses 7. Sales = Variable expenses + Fixed expenses + profits 8. Break even in units sold = (Fixed expenses) / (Contribution margin per unit) 9. Break even sales dollars = (Fixed expenses) / (Contribution margin ratio)
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Unformatted text preview: 10. Weighted average contribution margin = (Sales % of product A x CM of A) + (Sales% of product B x CM of product B) – continue formula for whatever amount of products are in the mix 11. Breakeven units (multiple products) =Fixed expenses / Weighted average CM per unit 12. Unit sales to achieve pre-tax profit = (Fixed expenses + Pre-tax profit)/ Contribution Margin per unit 13. Unit sales to achieve after-tax profit = (Fixed expenses + (After tax profit / (1-Tax rate)) / Con. Margin per unit 14. Operating Leverage = Contribution margin / Net Income 15. % Increase in Net Income = Operating Leverage x % Increase in Sales...
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This note was uploaded on 08/15/2011 for the course ACIS 2116 taught by Professor Cmeasterwood during the Spring '08 term at Virginia Tech.

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