Canadian Company reports the following total costs at two levels of production Costs 5,000 Units 10,000 Units No PRAGNIN

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Canadian Company Reports The Following Total Costs At Two Levels Of Production Costs 5 000 Units 10 000 Units No Pragnin 1 (39.2 KiB) Viewed 10 times

Canadian Company reports the following total costs at two levels of production Costs 5,000 Units 10,000 Units No PRAGNIN 1. Indirect labour 2. Property rates and taxes 3. Direct labour 4. Indirect material 5. Depreciation 6. Maintenance 2 3. 4. 5. 6. Variable cost Fixed cost $3,000 7,000 28,000 22,000 4,000 9,000 Mixed cost $6,000 7,000 56,000 44,000 Fixed cost/Unit contribution margin ratio=Break-even point in sales Actual (expected) sales - Break-even sales = Margin of safety Margin of safety/ Actual (expected) sales = Margin of safety ratio 4,000 11,000 Formulas for the CVP analysis: Units selling price - Unit variable cost = Unit contribution margin Unit contribution margin/Unit selling price = Contribution margin ratio Required sales - Variable costs-fixed costs = Target net income Fixed cost + Target net income/Unit contribution margin ratio = Required sales xed cost + Target net income/Unit contribution margin = Required units Fixed cost/Unit contribution margin = Break-even points in units Required sales- Variable costs - Fixed costs = Net income