Analysing Financial Performance Flashcards
1
Q
Budgets
A
Planned levels of income, expenditure or profit over a period of fime
2
Q
Variances
A
The differences between budgeted figures & actual figures
They can be adverse variance or favourable variance
3
Q
Contribution per unit formula
A
Selling price - Variable cost per unit
4
Q
Contribution per unit definition
A
The amount each unit sold contributes towards fixed costs
5
Q
A
6
Q
Total contribution formula
A
Contribution per unit x No of units sold
7
Q
Break even
A
Fixed costs / contribution per unit
8
Q
Purpose of break even
A
To set sales targets
To assess the viability of a business and help obtain a bank loan
9
Q
Margain of safety formula
A
Actual level of sales - Break even level of sales
