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Unformatted text preview: 1. Decision Point where INCREMENTAL (additional) fixed costs are covered by INCREMENTAL contribution 2. What is left over after covering variable costs that contributes toward covering fixed costs? 3. Use ratio cant do it on a per unit basis o What % of every sales dollar is left over after covering variable costs that contributes toward covering fixed costs? 4. Analysis o Qualitative o Quantitative (Contribution) Contribution rate 5. When there are only total value given 6. Contribution rate = 1-VC/Sales 7. What do our total $ Sales have to be at contribution rate of 1- (VC/Sales) to cover fixed costs? 8. Margin = FC/(Contribution Rate) = FC/(1- VC/Sales)...
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- Fall '10