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