Page 73 - PM Integrated Workbook 2018-19
P. 73
Cost Volume Profit Analysis
Fixed costs
Breakeven point in units =
Contribution per unit
Required profit + Fixed costs
Level of activity to earn a required profit =
Contribution per unit
Margin of safety = Budgeted level of activity – breakeven level of activity
Margin of safety expressed as a % = Budgeted sales – breakeven sales × 100
Budgeted sales
Contribution
Contribution to sales ratio (C/S ratio) =
Sales
Fixed costs
Breakeven point in sales revenue =
CS ratio
Required profit + Fixed costs
Sales revenue required to earn a target profit =
CS ratio
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