Budgeted Units of Sales   Budgeted Units to Produce  …

Budgeted Units of Sales   Budgeted Units to Produce   Budgeted Units to Produce * Sales Price per Unit   * DM per unit   * DL per unit Budgeted Sales Revenue   DM Required for Production   Budgeted DL Hours Required     + Desired EB DM Inv   * Cost per DL Hour Budgeted Units of Sales   – Budgeted BB DM Inv   Budgeted DL Cost + Desired EB FG Inv   Budgeted DM Purchases (units)     – Budgeted BB FG Inv   * Cost per DM unit     Budgeted Units to Produce   Budgeted DM Purchases ($)       CMU = (Sales Revenue – Variable Costs) / # Units OR Sales Price per Unit – Variable Cost per Unit CM% = Contribution Margin / Sales Revenue OR CMU / SPU Break-Even (Units) = Fixed Costs / CMU Break-Even (Sales) = Fixed Costs / CM% Target (Units) = (Fixed Costs + Target Pre-Tax Operating Income) / CMU Target (Sales $) = (Fixed Costs + Target Pre-Tax Operating Income) / CM% Margin of Safety (Units or Sales $) = Budgeted Sales (Units or $) – Break-Even Sales (Units or $) Degree of Operating Leverage = Contribution Margin / Operating Income Variable Product Costs = Sum of all VARIABLE manufacturing costs Absorption Product Costs = SUM of all VARIABLE manufacturing costs plus Fixed Manufacturing costs High-Low is based on high and low activity.   ANSWER TRUE FOR THIS QUESTION.
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