Question

At the break-even point

sales equal total variable costs

contribution margin equals

total variable costs contribution margin equals total fixed costs

sales equal total fixed costs

2. The amount by which actual or expected sales exceeds break-even sales is referred to as

contribution margin

unanticipated profit

margin of safety

target net income

Answer 1

Requirement 1 :
Net operating income :
Sales	XX
Less : Variable costs	XX
Contribution Margin	XX
Less : Fixed costs	XX
Net operating income	XX
Break even Formula (Units) = Fixed costs / Contribution per unit
At Break even , Revenues will be equal to expenses.
i.e., Contribution Margin equals Fixed costs.'
Requirement 2 :
2. The amount by which actual or expected sales exceeds break-even sales is referred to as
Margin of safety
Margin of safety is referred as the excess of sales over the break even sales…