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Flashcards in Chapter 3 lecture Deck (5)
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1
Q

Breakeven revenue

A

total revenue

2
Q

Breakeven volume

A

number of units sold

3
Q

Breakeven Point Formula

A

o In units: BEP unit quantity = FC / CMu

o Sales revenue: BEP sales = FC / CM%

4
Q

Sensitivity Analysis

A
•	What happens to profit if 
o	Selling price changes
o	Volume changes 
o	Cost structure changes 
•	Variable cost per unit changes 
•	Fixed cost changes
5
Q

Multiple Cost Drivers Formula

A
o	OI = Revenue – (UVC1 x Q1) + (UVC2 x Q2) – FC
•	UVC1 = unit variable cost driver 1
•	UVC2 = unit variable cost driver 2
•	Q1 = quantity of cost driver 1
•	Q2 = quantity of cost driver 2