Cost Ch. 4

Contribution margin =

Revenue -

• Cost of Goods Sold

• Variable Costs

• Variable Costs - Fixed Costs

• SG&A

Revenues - Variable Costs - Fixed Costs = Operating Income

To find Breakeven point, which variable in the above is replaced with zero?

• Revenues

• Variable Costs

• Fixed Costs

• Operating Income

Margin of Safety (in units) is

• Total units sold - Breakeven units

• the Contribution margin

• Breakeven units/Contribution Margin ratio

• the Relevant Range

Which of the following provides the number of cents of every dollar sold available to pay fixed costs?

• Margin of Safety

• Contribution margin ratio

• Gross margin per unit

• Cost-Volume-Profit

Target after-tax profit is all of the following EXCEPT

• Operating income * tax rate

• Operating income - income taxes

• Operating income - (Operating income * tax rate)

• Operating income *

  (1 - tax rate)