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CVP Analysis Formula

The document outlines 14 important formulas used in CVP (Cost-Volume-Profit) analysis including calculating revenues, total costs, operating income, variable costs, contribution margin, breakeven point, and margin of safety. Revenues are calculated as selling price times units, and operating income is revenues minus total costs. Total costs equal variable costs plus fixed costs plus overhead. Breakeven point in units is calculated as fixed costs divided by contribution margin per unit.

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Hafizah Mat Nawi
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206 views1 page

CVP Analysis Formula

The document outlines 14 important formulas used in CVP (Cost-Volume-Profit) analysis including calculating revenues, total costs, operating income, variable costs, contribution margin, breakeven point, and margin of safety. Revenues are calculated as selling price times units, and operating income is revenues minus total costs. Total costs equal variable costs plus fixed costs plus overhead. Breakeven point in units is calculated as fixed costs divided by contribution margin per unit.

Uploaded by

Hafizah Mat Nawi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CVP analysis

Important formulas:
1.
2.
3.
4.
5.
6.
7.
8.

Revenues = Sales= Selling Price x Units


Total costs = Variable costs + Fixed costs + Overhead
Operating income= Revenues- Total costs
Variable costs = Variable cost per unit x Units
Contribution margin = Revenues Variable costs
Contribution margin per unit = Selling price Variable cost per unit
Contribution margin = Revenues Variable costs
Contribution margin ratio % = Contribution margin per unit/ Selling price
@ Contribution margin/ Revenues
9. Operating income = Contribution margin Fixed costs
10.Breakeven point (in unit) = Fixed cost/ Contribution margin unit
11.Breakeven point (required to be sold) = (Fixed costs + Target operating
income)/ Contribution margin
12.Breakeven point revenue ($) = Breakeven point in unit x Selling price
Or Breakeven point revenue ($) = Fixed costs/ Contribution margin ratio
13.
14.

Total operating income = Net income / (1- tax rate)


Margin of safety = Revenues Breakeven revenue

Revenues
Selling price
Total costs
Variable costs
Fixed costs
Operating income
Target
operating
income
Contribution margin
Contribution
margin
per unit
Contribution
margin
ratio %
Breakeven point in unit
Breakeven
point
Revenue $
Margin of safety

Rev
SP
TC
VC
FC
OI
TOI
CM
CMP
U
CMR
BEQ
BER
MOS

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