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Basic Cost Equations
basic cost equations for BPA
Question | Answer |
---|---|
cost per unit | fixed cost per unit + variable cost per unit |
Total Cost | CPU * Units Sold (US) |
TFC (Total Fixed Cost) | FCPU * US |
TVC (total variable cost) | VCPU * US |
Revenue per unit | amount of revenue obtained from each sale |
TR (Total revenue) | RPU * US |
Contribution Margin per Unit (CM) | RPU - VCPU |
Breakeven Point (BEP) in units | TFC / CM |
BEP in dollars | BeP * RPU |
Economic Order Quantity | SQRT[(2*Fixed Costs*Annual Usage)/(Carrying Cost*Unit Cost)] |