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Chap 4 Equations

# Chap 4 Equations - =Contribution Margin per Unit/Price Unit...

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Equations for Exam 2 Most of these Equations may be used on Exam 2. No question will require an equation not include here, but you may have to solve for any part of an equation or use multiple equations to solve a problem. YOU MAY NOT USE THIS SHEET WHEN TAKING THE EXAM! Total Costs = fixed costs + (variable cost per unit) (units) Y = a +bX High-low calculation: Variable cost per unit = (Difference between High and Low Variable Cost)/Change in activity Total Variable Cost = Variable cost per unit x units. Profit = Sales – Total Variable Cost - Fixed Expenses = Quantity (Price) – Quantity(Variable Cost per Unit) – Fixed Expenses = Quantity (Unit Contribution Margin) – Fixed Expenses Contribution Margin = Sales – total variable costs Net operating income = Total Sales – Total Variable Costs – Fixed costs Total Sales = Sales price x units sold Contribution Margin per Unit = Price – Variable Cost per Unit Contribution Margin Ratio = Contribution Margin/Total Sales

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Unformatted text preview: =Contribution Margin per Unit/Price Unit Sales to Achieve a Target Profit = (Target Profit + Fixed Expenses)/Contribution Margin per unit Dollar Sales to Achieve Target Profit = (Target Profit + Fixed Expenses)/Contribution Margin Ratio) Unit Sales to Break Even = Fixed Expenses/ Contribution Margin per Unit Dollar Sales to Break Even = Fixed Expenses/ Contribution Margin ratio Margin of safety in dollars = Total sales in dollars - Break-even sales in dollars Margin of safety in units = Total sales in units – Break-even sales Degree of operating leverage = Contribution margin/Net Operating Income Percent Increase in Profits = Degree of operating Leverage (Percent Increase in Sales) And let’s not forget: Within the relevant range: Variable costs are constant per unit, but not in total Fixed costs are constant in total, but not per unit...
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