Can you test me on these equations I have to learn them: 1. Contribution margin per unit = Selling price per unit – Variable cost per unit 2. Net income = Total Contribution margin... Can you test me on these equations I have to learn them: 1. Contribution margin per unit = Selling price per unit – Variable cost per unit 2. Net income = Total Contribution margin – Total Fixed cost 3. Contribution margin (CM) ratio = Contribution margin per unit / Selling price per unit 4. Break-even point (units) = Total Fixed cost / CM per unit 5. Break-even point (dollar sales) = Total Fixed cost / CM ratio 6. Units sales to attain target profit = (Total Fixed cost + Target profit) / CM per unit 7. Dollar sales to attain target profit = (Total Fixed cost + Target profit) / CM ratio 8. Margin of safety = Total budgeted or actual sales – Break-even sales 9. Margin of safety percentage ratio = Margin of safety / Total budgeted or actual sales.
Understand the Problem
The question is asking for a test or quiz based on several key financial equations related to contribution margin, net income, break-even analysis, and margin of safety concepts. The user is seeking an evaluation of their understanding of these financial formulas.
Answer
Certainly! Here are some sample questions based on the formulas you've learned.
Certainly! Here are some sample questions based on the formulas you've mentioned: 1. If the selling price per unit is $50 and the variable cost per unit is $30, what is the contribution margin per unit? 2. If the total contribution margin is $5,000 and total fixed costs are $3,000, what is the net income? 3. If the contribution margin per unit is $20 and the selling price per unit is $50, what is the CM ratio? 4. If total fixed costs are $10,000 and CM per unit is $25, what is the break-even point in units? 5. If total fixed costs are $10,000 and CM ratio is 0.4, what is the break-even point in dollar sales? 6. If total fixed costs are $14,000, target profit is $6,000, and CM per unit is $20, how many units need to be sold to attain the target profit? 7. If total fixed costs are $14,000, target profit is $6,000, and CM ratio is 0.4, what dollar sales are required to attain the target profit? 8. If total budgeted sales are $50,000 and break-even sales are $40,000, what is the margin of safety? 9. What is the margin of safety percentage if the margin of safety is $10,000 and total budgeted sales are $50,000?
Answer for screen readers
Certainly! Here are some sample questions based on the formulas you've mentioned: 1. If the selling price per unit is $50 and the variable cost per unit is $30, what is the contribution margin per unit? 2. If the total contribution margin is $5,000 and total fixed costs are $3,000, what is the net income? 3. If the contribution margin per unit is $20 and the selling price per unit is $50, what is the CM ratio? 4. If total fixed costs are $10,000 and CM per unit is $25, what is the break-even point in units? 5. If total fixed costs are $10,000 and CM ratio is 0.4, what is the break-even point in dollar sales? 6. If total fixed costs are $14,000, target profit is $6,000, and CM per unit is $20, how many units need to be sold to attain the target profit? 7. If total fixed costs are $14,000, target profit is $6,000, and CM ratio is 0.4, what dollar sales are required to attain the target profit? 8. If total budgeted sales are $50,000 and break-even sales are $40,000, what is the margin of safety? 9. What is the margin of safety percentage if the margin of safety is $10,000 and total budgeted sales are $50,000?
More Information
Practicing with real-world examples can help solidify your understanding of these equations. Try substituting values and calculating each formula to see how changes affect outcomes.
Tips
A common mistake is confusing formulas that involve 'per unit' with those that are total amounts. Pay careful attention to the variables required by each formula.
Sources
- Contribution Margin | Formula + Calculator - Wall Street Prep - wallstreetprep.com
- Break Even Point (BEP) | Formula + Calculator - Wall Street Prep - wallstreetprep.com
- Contribution Margin - Overview, Guide, Fixed Costs, Variable Costs - corporatefinanceinstitute.com
AI-generated content may contain errors. Please verify critical information
