Important Equations

Question 1

Total Contribution

Answer 1

CPU x Quantity = Total Contribution

Question 2

Contribution Per Unit

Answer 2

Selling Price - Variable Cost = CPU

Question 3

Profit

Answer 3

Total Contribution - Fixed Cost = Profit
or
Revenue - Total Cost = Profit

Question 4

Forecast Profit

Answer 4

Total Cost - Fixed Cost = Forecast Profit

Question 5

Break Even

Answer 5

Fixed Cost - CPU = Break Even

Question 6

Variable Cost

Answer 6

All the changeing cost such as raw materials, Credit card fees. So add all the VC.

Question 7

Fixed Cost

Answer 7

All the costs that don’t change such as internet bills, rent and salaries.