CVP ANAYLSIS...BASIC TERMS

CVP ANAYLSIS...BASIC TERMS - OR 11. $SALES AT B.E.P. = TFC/...

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Dr. Kiani CHAPTER 6: COST VOLUME (CVP) ANAYSIS Summary of Basic terms and equations : 1. TFC= FIXEDMFG OVERHEAD COST(FFOH)+FIXED SELLING & ADMIN. 2. TVC=VARIABLEMFGCOSTS(DM+DL+VFOH)+VARIABLESELLING& ADMIN.COSTS(S&A) 3. TC= TFC+TVC= Y= a+ b(x) X= ACTIVITY DRIVER 4. P= SELLING PRICE PER UNIT 5. TVC/unit = b= total variable cost per unit 6. CM/UINT=P-TVC/unit 7. CM RATIO=CM/UNIT/P 8. VC RATIO= TVC/UNIT/P 9. B.E.P IN UNITS= TFC/CM per unit 10. $ SALES AT B.E.P =( NO.9 ABOVE)(P)
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Unformatted text preview: OR 11. $SALES AT B.E.P. = TFC/ CM ratio 12. TARGET SALES VOLUME IN UNITS =(TFC +DESIRED NI)/ (cm per unit) 13. TARGET SALES IN $ =(TFC+DESIRED NI)/ (CM ratio) 14. MOS =MARGIN OF SAFETY =ACTUAL(BUDGETED)SALES SALES AT BREAK EVEN POINT 15. MOS RATIO = (MOS)/ (SALES) 16. DEGREE OF OPERATING LEVERAGE = (CONTRIBUTION MARGIN)/(NET INCOME) 17. CM =CONTRIBUTION MARGIN = SALES -- TVC...
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