FINC 577 Chapter 5 Notes Outline

The computation for vargo video is as follows chapter

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Unformatted text preview: as follows: Chapter 5-39 BreakBreak-Even Analysis: Target Net Income Contribution Margin Technique To determine the required sales in units for Vargo Video: To determine the required sales in dollars for Vargo Video: Video: Chapter 5-40 BreakBreak-Even Analysis: Margin of Safety Difference between ____________________ and sales at the _________________________. Measures the “cushion” that management has, that Measures allowing it to break-even even if expected sales fail to materialize. May be expressed in dollars or as a ratio. To determine the margin of safety in dollars for Vargo Video assuming that actual/expected sales are $750,000: Chapter 5-41 BreakBreak-Even Analysis: Margin of Safety Margin of Safety Ratio Computed by dividing the margin of safety in dollars by the actual or expected sales. by To determine the margin of safety ratio for Vargo Video assuming that actual/expected sales are $750,000: The higher the dollars or the percentage, the greater the margin of safety. Chapter 5-42 Example Example 1 Russel...
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