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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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- Spring '08