Match the word to the correct defintion. Column A Column B 1. a. Equation method 2. b. Contribution margin (CM) ratio C. Contribution margin method 3. d. CVP analysis 4. e. Operating Leverage f. Break-even point 5. - g. Margin of Safety 6. The excess of budgeted (or actual) sales over the break-even volume of sales A measure of how sensitive net income is to a given percentage change in sales computed by dividing the contribution margin by net income A tool for multiplying force A method of computing the break-even point that relies on the equation, sales = variable expenses + fixed expenses+ profits A graph that highlights CVP relationships over wide ranges of activity The contribution margin as a percentage of total sales A method of computing the break-even point in which the fixed expenses are divided by the contribution margin per unit. A tool that helps managers understand the interrelationships between cost, volume and profit The amount available to cover fixed expenses and then provides profits for the period The level of sales at which profit is zero. The breakeven point can also be defined as the point where total sales equals total expenses or as the point where total contribution margin equals total fixed expenses h. CVP graph 7. i. Lever j. Contribution margin 8. 9. 10