Computation of CM ratio, break-even point and the number of units to sell to earn a target profit (target profit analysis).
Cost volume and profit relationships problems
Computation of break-even point and preparation of CVP graph or break-even chart. Impact of change in variable and fixed cost.
The effect of shift in sales mix on the break-even point of a multiproduct company.
Computation of CM ratio and degree of operating leverage. The use of CM ratio and the degree of operating leverage in computing the expected increase increase net operating income.
The impact of change in sales mix on the contribution margin, break-even point and margin of safety.