FORMULA SHEET

• Break-Even Revenue = Fixed Costs + Variable Costs

• Contribution Margin = Revenue – Variable Costs

• Break-even point/unit = Fixed Costs / Contribution Margin

• Break-even point with profit = (Fixed Costs + Expected Profit) / Contribution Margin

• Profit = Selling Price x (Quantity) – Variable Costs x (Quantity) – Fixed Costs

• Margin of safety in units (total) = total actual units of activity – total units at break-

even point

• Margin of safety in dollar (total) = total actual revenue – total revenue at break-even

point

• Sales mix = No. of sales units of product / total no. of sales units of all products

• WACM = Σ (units CM x sales mix)

• Pre-tax profit = after-tax profit / (1-tax rate)

• Contribution margin ratio = Contribution Margin per unit/ Selling price per unit

• Contribution margin ratio = Total Contribution Margin / Total Sales

• Payback period = initial cost of investment / net annual cash flows

• Present Value = Future Value / (1 + i)n