to the goods produced (along with the variable product costs). This method is required by US GAAP and U.S. income taxes. Mark as wrong Mark as right gross profit (or) gross margin This is calculated by subtracting the...
to the goods produced (along with the variable product costs). This method is required by US GAAP and U.S. income taxes. Mark as wrong Mark as right gross profit (or) gross margin This is calculated by subtracting the...
This ratio indicates the percentage of each sales dollar that is available to cover a company’s fixed expenses and profit. The ratio is calculated by dividing the contribution margin (sales minus all variable...
A term that is sometimes used interchangeably with gross profit. Others use the term to mean the percentage of gross profit dollars divided by net sales dollars.
Dollars of gross profit divided by the dollars of net sales. Also known as gross margin.
The result of subtracting all variable expenses from revenues. It indicates the amount available from sales to cover the fixed expenses and profit.
Our Explanation of Break-even Point illustrates how to determine the number of units or sales dollars that will result in zero net income. The techniques rely on a product's contribution margin or contribution margin...
component and a variable component. Mark as wrong Mark as right break-even point in units This is the result of dividing a company’s fixed expenses for a period of time by the contribution margin per unit of product....
What is contribution margin? Definition of Contribution Margin In accounting, contribution margin is defined as: revenues minus variable expenses. The contribution margin can be expressed as an amount and/or as a...
A term used in break-even analysis to indicate the amount of sales that are above the break-even point. In other words, the margin of safety is the amount by which a company’s sales could decrease before the...
and expenses. Net Sales Wrong. Net Sales is Gross Sales minus Sales Discounts and Sales Returns and Allowances. Operating Income Right! 15. What is defined as sales minus all variable expenses? Contribution Margin...
See nonprofit organization.
Net sales revenues minus the cost of goods sold.
What is illusory profit? Illusory profit, also called phantom profit, is the difference between 1) the profit reported using historical costs required by US GAAP, and 2) the profit computed using replacement costs....
A sole proprietorship, partnership, or corporation organized for the purpose of earning profits and enhancing the financial position of the owners.
See gross profit percentage.
A division or department of a business whose managers are responsible for both revenues and expenses.
Also referred to as the P & L and the income statement. To learn more, see Explanation of Income Statement.
Quiz for this topic. For more insight regarding a specific question, use the search box at the top of the page. 1. Sales minus variable costs equals the __________ margin. 2. The sales in excess of the amount of sales...
is the remainder of a company’s net sales minus its cost of goods sold. Gross profit is often expressed as a dollar amount and as a percentage of net sales. The gross profit is also known as gross margin. Selling,...
What is the difference between gross profit and net profit? Definition of Gross Profit Gross profit is defined as net sales minus the cost of goods sold. Example of Gross Profit Assume that a retailer had gross sales of...
Our Explanation of Income Statement helps you learn the most important features of a corporation's income statement (also known as the statement of operations or profit and loss statement). We provide more understanding...
Selling price per unit minus variable costs per unit, or revenues per unit minus expenses per unit.
Does a dividend reduce profit? Definition of Dividend A dividend declared by a corporation is a distribution to its stockholders of the profits the corporation had earned. Since the dividends are not an expense, the...
What is the profit and loss statement? Definition of Profit and Loss Statement The profit and loss statement, or P&L, is a name sometimes used to describe a company’s income statement, statement of income,...
The analysis of how profits change as volume changes. The calculation of the break-even point is a part of cost-volume-profit analysis.
__________ __________ as volume changes. Select... in total per unit 26. The __________ __________ is defined as revenues minus variable costs. Select... contribution margin gross profit opportunity cost Match one of...
How do we deal with a negative contribution margin ratio when calculating our break-even point? Definition of Negative Contribution Margin A negative contribution margin ratio indicates that a company’s variable costs...
on knowing how a company’s costs or expenses will change as the volume of sales change. The break-even point calculation is based on the following amounts: Total amount of fixed expenses Variable expenses per unit or...
What is the break-even formula? Break-even Point in Units of Product The formula for determining the break-even point in units of product sold is: total fixed expenses divided by the contribution margin per unit. For...
expenses. These include rent, depreciation, salaries of managers and executives, etc. A reduction in the contribution margin. Contribution margin is sales minus the variable expenses. Hence, an increase in the variable...
How do you calculate the break-even point in terms of sales? Definition of Break-even Point in Sales Dollars The break-even point in sales dollars can be calculated by dividing a company’s total fixed expenses by the...
Is contribution margin the same as operating income? Definition of Contribution Margin Contribution margin is defined as revenues minus the variable costs and variable expenses. Example of Contribution Margin Assume that...
at $__________. 23. The product’s contribution margin per unit is $__________. 24. The product’s gross profit per unit is $__________. 25. Assuming the company manufactured and sold 100,000 units, its net income...
A word to describe whether a company is able to earn more revenues than expenses.
. The break-even point could be determined by using an electronic spreadsheet or by using a formula. The key is to determine how each of the company’s costs and expenses behave in order to compute the total amount of...
(including semivariable expenses) into fixed costs/expenses and variable costs/expenses. For simple businesses with similar products or services, the total amount of fixed costs/expenses is divided by the...
), in units, hours of services provided, etc. The basic calculation of the break-even point in sales dollars for a year is: fixed expenses (fixed manufacturing, fixed SG&A, fixed interest) for the year divided by the...
___________ are equal to total costs. REVENUES UERVNESE Unscramble REVENUES RVEUEENS Unscramble 2. Revenues minus variable costs equals the _________________ margin. CONTRIBUTION BNIUTRCNTIOO Unscramble CONTRIBUTION...
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