Cost-Volume-Profit Analysis – Flashcards
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Contribution-margin ratio
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The unit contribution margin divided by the sales price per unit.
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Profit-volume graph
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A graphical expression of the relationship between profit and sales volume.
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Safety margin
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Difference between budgeted sales revenue and break-even sales revenue.
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Sales mix
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The relative proportions of total sales of each of an organization's products and services.
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Sensitivity analysis
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A technique for determining what would happen in a decision analysis if a key prediction or assumption proves to be wrong.
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Total contribution margin
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Total sales revenue minus total variable expenses.
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Unit contribution margin
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Sales price minus the unit variable cost. This is the amount that each unit "contributes" to covering fixed costs.
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Weighted-average unit contribution margin
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Average of a firm's several products' unit contribution margins, weighted by the relative sales proportion of each product.
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Cost-volume-profit (CVP) graph
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A graphical expression of the relationships between sales volume, expenses, revenue, and profit.
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Cost-Volume-Profit Analysis (topic)
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A study of the relationships between sales volume, expenses, revenue, and profit. MORE:Covered in session 3.
