Cost volume-profit CVP Analysis

¿ cost (¿ expenses)
Breakeven point sales volume =
contribution margin per unit

¿ cost (¿ expenses)
Breakeven point peso sales =
contribution margin percentage

Contribution margin
This is the difference between units selling price and unit variable cost and
expense.

Contribution margin percentage

This is the ratio of unit contribution margin to unit selling price or the ratio of total
contribution margin to total sales.

Example. Fixed cost and expenses amount of P80, 000. Unit selling price is P40 and
unit variable costs and expenses amount to P30. Relevant range is from zero to twenty
thousand units.
Unit selling price P40 100%
Unit variable cost and expenses P30 75%
Contribution margin P10 25%

Contribution margin per unit = unit selling price – unit variable = P40-P30 = P10.
Contribution Margin = contribution margin per unit / unit selling = 10/40= 25%
Breakeven point sales volume = P80, 000 / P10 = 8,000 units
Breakeven point peso sales = P80, 000 / 25% = P320, 000