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Accounting for Management
Explanations, Exercises, Problems and Calculators
Cost volume and profit relationships
Compute and explain contribution margin and contribution margin ratio (CM ratio).
Prepare contribution margin income statement.
Compute break-even point of a single and a multiproduct company. Explain the importance of break-even point figure for a business.
Explain sales mix. How does a change in sales mix impact contribution margin, break-even point and net operating income of a business?
Compute and explain margin of safety for a business.
Find out the sales volume required to earn a certain amount of profit (target profit analysis).
Number of pages:
Approximate time required:
2.5 – 3 hours
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Contribution margin ratio
Contribution margin income statement
Break-even point analysis
Break-even analysis with multiple products
Sales mix and break-even point analysis
Margin of safety
Target profit analysis