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Unformatted text preview: 19. Units required to reach T.P. = (T.P. Cont. Marg.) / (C.M. per unit) 20. Degree of Operating Leverage = (C.M.) / (Operating Income) 21. % increase in Operating Income = (% increase in sales) x (DoOL) 22. DoOL % = (DoOL) / (Sales) 23. Margin of Safety % = MoS Ratio = (MoS) / (Actual Sales) 24. B.E. Sales ($) = (1 MoS%) x (Actual Sales) 25. B.E. Sales ($) = (1 MoS%) x (Actual units times Sales per unit) 26. Operating Income = (MoS%) x (C.M.) 27. Operating Income = (MoS%) x (Sales) x (C.M. Ratio) 28. When multiple products are present, C.M., C.M. Ratio, etc must be computed by totaling amounts for each product for that product mix. (Product mix means the same as Sales mix for our purposes.) The calculations are only valid if that product mix (sales mix) remains the same. This creates a whole new list of relationships / cost behaviors based upon how product mix can effect C.M., C.M. Ratio, B.E., T.P., etc....
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This document was uploaded on 10/26/2011 for the course ACC 222 at Miami University.
- Spring '08
- Managerial Accounting