- This topic has 4 replies, 2 voices, and was last updated 2 years ago by
.
Viewing 5 posts - 1 through 5 (of 5 total)
- Posts
Dear Tutor,
I am having problem understanding why we calculate C/S ratio. Can you help me please
The C/S ratio is useful in its own right as it tells us what percentage each $ of sales revenue contributes towards fixed costs.
It is also invaluable in helping us to quickly calculate the break-even point in $ sales revenue, or the sales revenue required to generate a target profit.
FC / CS Ratio = B E Sales Revenue
Which is the same as FC / Cont per unit = BE units which multiplied by the selling price also gives you B E Sales Revenue
Viewing 5 posts - 1 through 5 (of 5 total)
- You must be logged in to reply to this topic.