ACCTING 1002 Lecture Notes - Contribution Margin, Fixed Cost, Variable Cost

Choose the correct option for the below:

The contribution margin ratio is equal to - 

A. Fixed costs divided by contribution margin per unit.

B. Net sales revenue per unit minus variable costs per unit.

C. Net sales revenue minus variable costs.

D. Contribution margin divided by net sales revenue.

Choose the correct answer for the below:

The contribution margin ratio is equal to -

1. fixed costs divided by contribution margin per unit.
2. net sales revenue per unit minus variable costs per unit
3. net sales revenue minus variable costs
4. contribution margin divided by net sales revenue 

Cost-volume-profit (CVP)

posted Nov 28, 2016, 4:07 AM

Cost-volume-profit (CVP) analysis is a key step in manydecisions. CVP analysis involves specifying a model of therelations among the prices of products, the volume or level ofactivity, unit variable costs, total fixed costs, and the salesmix. This model is used to predict the impact on profits of changesin those parameters. Explain how changes in activity affectcontribution margin and net operating income.