CVP Analysis Formulas

1. Unit selling price – Unit variable cost = Unit contribution

2. Unit contribution * Unit sold = Total contribution

3. Total contribution = Total fixed cost + Profit

4. In Units

Total fixed cost

BEP (units) = ---------------------------------------------------

Selling price – Variable cost per unit

or
Total fixed cost

= -----------------------------------------

Contribution

5. ii) In volume:

Total fixed cost

BEP (rupees) = ---------------------------------------

Variable cost per unit

1 – ----------------------------------

Selling price

6. P/V Ratio: Variable cost per unit

1- -------------------------------------------

Selling Price per unit

7. Sales to be made to get a required profit

Required profit + Fixed cost

Units to be sold = ---------------------------------------------

Contribution per unit

8. Margin of Safety = Total sales – Break even sales

Formula for Multi product Firm:

9. Contribution Margin or P/V ratio

Contribution

= ---------------------------

Sales

10. Variable cost ratio

Variable Cost

= --------------------------

Sales

11. BEP (Volume)

Fixed Cost

BEP= ----------------------

P/V

12. To calculate Pretax income.

Ib = Pretax income

In = Net income

t = Tax rate

In

Ib = ---------------

1- t

13. Revised CVP equation to arrive at the break even point.

Sales = Fixed cost + Pretax income

P/V ratio

14. Sales Mix = Departmental Sales

Total Sales