Marginal Costing Equation Sales - Variable Cost = Fixed Cost + Profit

1. Contirbution= Sales - Variable Cost or Fixed Cost + Profit

2. Profit Volume Ratio(P/V Ratio) = Contribution/ Sales

3. Break Even Point(BEP)

3.1. BEP(Volume) = Fixed Cost / Contribution per Unit

3.2. BEP (Value) = Fixed Cost / P/V Ratio or BEP(Volume) * SP per Unot

3.3. Cash BEP = (Total Fixed Cost - Depreciation & other non cash expenses) / Contribution per Unit

4. Sales at Desired Profit

4.1. Volume= (Fixed Cost + Desired Profit) / Contribution per Unit

4.2. BEP (Value) = (Fixed Cost + Desired Profit) / P/V Ratio

5. Margin of Safety (MOS)

5.1. Total Sales - BEP Sales or Profit / P/V Ratio

5.2. MOS Ratio= MOS Sales/ Total Sales