cvp definitions consider the following terms and definitions 645944

1. Costs that do not change in total despite wide changes in volume.

a. Breakeven

2. The sales level at which operating income is zero: Total revenues equal total costs.

b. Contribution margin

3. Drop in sales a company can absorb without incurring an operating loss.

c. Cost behavior

4. Combination of products that make up total sales.

d. Margin of safety

5. Sales revenue minus variable costs.

e. Relevant range

6. Describes how costs change as volume changes.

 f. Sales mix

7. Costs that change in total in direct proportion to changes in volume.

g. Fixed costs

8. The band of volume where total fixed costs remain constant and the variable

h. Variable costs