Card Set Information
the level of sales at which profit is zero
A ratio computed by dividing contribution margin by dollar sales
Contribution Margin Ratio(CM ratio)
A graphical representation of the relationships between an organization's revenues, costs, and profits on the one hand and its sales volume on the other hand.
Cost-Volume-Profit (CVP) Graph
A measure, at a given level of sales, of how a percentage change in sales will affect profits. The ______is computed by dividing contribution margin by net operation income.
Degree of operation leverage
An analytical approach that focuses only on those costs and revenues that change as result of a decision.
The excess of budgeted (or actual) dollar sales over the break-even dollar sales.
Margin of Safety
A measure of how sensitive net operating income is to a given percentage change in dollar sales.
the relative proportions in which a company's products are sold. ____ is computed by expressing the sales of each product as a percentage of total sales
Estimating what sales volume is needed to achieve a specific target profit.
Target profit analysis.
A ratio computed by dividing variable expenses by dollar sales
Variable expense ratio