Study Plan: Cost-Volume-Profit (CVP) Analysis
Knowledge Targets
I can define the following terms as they relate to our unit:
| Contribution margin | Fixed Costs | Variable Costs | Profit |
| Break even point | Margin of safety | Targeted Income |
Contribution margin ratio |
Reasoning Targets
- I can identify costs as fixed or variable.
- I can explain how changes in volume affect contribution margin.
- I can explain the significance of margin of safety.
- I can explain the importance of calculating break even point.
Skill Targets
- I can calculate contribution margin and contribution margin ratio.
- I can determine the break even point in units and dollars.
- I can calculate the level of sales necessary to achieve a targeted income or profit.
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