Question: TOTAL COST = FIXED COSTS + (VARIABLE COST PER UNIT x # of UNITS) CMU (Unit Contribution Margin) = Unit Selling Price Unit Variable Cost

TOTAL COST = FIXED COSTS + (VARIABLE COST PER UNIT x # of UNITS) CMU (Unit Contribution Margin) = Unit Selling Price Unit Variable Cost CM% (Contribution Margin Ratio) = CM/Sales Revenue = CMU/ Unit Selling Price Break-Even Units = Fixed Costs/CMU Break-Even Sales Dollars = Fixed Costs/CM% Target Sales Units = (Fixed Costs + Target Profit)/CMU Target Sales = (Fixed Costs + Target Profit)/CM% Margin of Safety = Actual Sales Break-Even Sales Weighted Average CM% = CM%*Sales Mix% + CM%*Sales Mix% Break-Even Sales = (FC)/WTD AVG CM% Target Sales = (FC+Target Profit)/WTD AVG CM%

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