NOTATION

TR = Total Revenue S = Selling Price per unit

TC = Total Costs
VC = Variable Costs per unit
TVC = Total Variable Costs
FC = Fixed Costs for a specific period
x = Number of units produced and sold
NI = Net Income
CM = Contribution Margin (per unit)
CR = Contribution Ratio
TCM = Total Contribution Margin

FORMULAS

Total Variable Costs | 7.1 (a)

TVC = VC × x
Total Costs | 7.1 (b) Cost-Volume-Profit Analysis | 7.2 (a)
TC = FC + TVC S × x = FC + (VC × x) + NI
Total Revenue | 7.1 (c) Number of Units | 7.2 (b)
𝐹𝐶 + 𝑁𝐼
TR = S × x 𝑥=
(𝑆 − 𝑉𝐶)
Net Income | 7.1 (d)
Number of Units at the Break-Even Point | 7.3
NI = TR – TC 𝐹𝐶
𝑥𝐵𝐸 =
𝐶𝑀
At the break-even point | 7.1 (e)
Contribution Margin Percent | 7.4 (a)
At the break-even point, TR = TC
𝑇𝑅 − 𝑇𝑉𝐶
Contribution Margin per Unit | 7.1 (f) 𝐶𝑀 𝑃𝑒𝑟𝑐𝑒𝑛𝑡 = × 100%
𝑇𝑅
CM = S – VC Net Income | 7.4 (b)
Contribution Ratio | 7.1 (g) NI = (CM Percent × TR) – FC or NI = TCM - FC
𝐶𝑀
𝐶𝑅 = × 100%
𝑆