1.7 Symbols and Formulas

Symbols Used

BEDMAS: An acronym for Brackets, Exponents, Division, Multiplication, Addition, and Subtraction.

CM = Contribution Margin

CR = Contribution Rate

d = Discount Rate

D$: = Markdown Amount

n = a frequency or count or total

N = in merchandising it is the net price; in single payment compound interest it is the number of compound periods; in annuity compound interest it is the number of annuity payments

NI = net income

TFC =  Total Fixed Costs

TR = Total Revenue

TV = Total Variable

TVC = Total Variable Cost

VC: = Unit Variable Cost

x = any individual piece of data

Formulas used

Formula 1.1 Unit Variable Cost

[latex]VC = \frac {TVC}{n}[/latex]

Formula 1.2 Net Income Using a Total Revenue and Cost Approach

[latex]NI = n(S) - (TFC + n(VC))[/latex]

Formula 1.3 Break-Even Analysis

[latex]CM = S-VC[/latex]

Formula 1.4 Unit Break-Even

[latex]n = \frac {TVC}{CM}[/latex]

Formula 1.5 Dollar Break-Even

[latex]TR = \frac {TVC}{CR}[/latex]

Formula 1.6 Contribution Rate

[latex]CR = \frac {TR - TV}{TR} \times 100[/latex]