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Business LibreTexts

5.1: Chapter 5 Study Plan

  • Page ID
    10611
  • 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.

    Click CVP Study Plan for a printable copy.