Formula (CVP analysis + Linear Cost Function)

CM = S VC
CMu = SP VCu
CM = CMu x Q
CMR = CMu SP or (CM Sales)
Sales VC FC = Operating Income (OI)
Q (SP-VCu) FC = OI
Q (CMu) FC = OI
CM FC = OI
CM = OI + FC
Q = (FC + OI)
CMu
BEQ = FC CMu
BE Sales ($) = FC CMR
BE Sales ($) = BEQ x SP
NI= OI x (1-Tax Rate)
TOI =

NI
(1-Tax Rate)
Targeted Q = (FC + TOI)
CMu
Targeted Q= FC + TNI/(1 Tax Rate)
CMu
1

SP = CMu + CVu
Margin of safety (In dollars) = Sales BE sales
Margin of safety (in units) = units sold BEQ
Margin of safety percentage = Margin of safety in dollars
Budgeted revenues
Degree of operating leverage = Contribution margin
Operating income
Average CMu= (CMu of product 1 x Q of product 1) + (CMu of product 2 x Q of product 2)
Weighted average CMu=Average CMu Number of Q of Product1 + Number of Q of Product 2
Bundle Breakeven quantity (units) = Fixed Cost Weighted average CMu
Weighted-average CMR= product 1 CMR + Product 2 CMR Sales
Breakeven value (in dollars) =Fixed Cost Weighted average CMR
Gross margin = Revenues - Cost of goods sold
Contribution margin = Revenues - All variable costs
Gross Margin Percentage = Gross Margin / Sales
Linear Cost Function: y = a + b x