Terms to Learn

This chapter and the Glossary at the end of the text contain definitions of the following important terms:

  1. breakeven point (BEP)
  2. choice criterion
  3. contribution income statement
  4. contribution margin
  5. contribution margin per unit
  6. contribution margin percentage
  7. contribution margin ratio
  8. cost–volume–profit (CVP) analysis
  9. decision table
  10. degree of operating leverage
  11. event
  12. expected monetary value
  13. expected value
  14. gross margin percentage
  15. margin of safety
  16. net income
  17. operating leverage
  18. outcomes
  19. probability
  20. probability distribution
  21. PV graph
  22. revenue driver
  23. sales mix
  24. sensitivity analysis
  25. uncertainty