Ch 4 · Marginal Costing & CVP Analysis

5 concept points · 6 formulas · 4 exam-critical points.

📘 Core concepts

• 1Marginal cost = variable cost; charge fixed cost to period.
• 2Contribution = Sales − Variable Cost. Profit = Contribution − Fixed Cost.
• 3Break-even point: where total revenue = total cost.
• 4Margin of safety: actual/budgeted sales above BEP.
• 5Decision-making: make-or-buy, accept/reject special order, key factor analysis.