BUSINESS FORMULAS JAN ASSESMENT

Question 1

What is the formula for sales volume?

Answer 1

Sales volume = sales revenue / selling price

Question 2

What is the formula for sales revenue?

Answer 2

Sales revenue = selling price x sales volume

Question 3

What is the formula for total costs?

Answer 3

Total costs = fixed costs + variable costs

Question 4

What is the formula for contribution per unit?

Answer 4

Contribution per unit = selling price - variable cost per unit

Question 5

What is the formula for the break even point?

Answer 5

Break even point = total fixed costs / contribution per unit

Question 6

What is the formula for margin of safety?

Answer 6

Margin of safety = actual output - break even output

Question 7

What is the formula for variance?

Answer 7

Variance = actual figure - budgeted figure

Question 8

What is the formula for cyclical variation?

Answer 8

Cyclical variation = actual sales figure - moving average

Question 9

What is the formula for payback period?

Answer 9

Payback period = amount invested / annual net cash flow

Question 10

What is the formula for ARR?

Answer 10

ARR = average net return / investment x 100

Question 11

What is the formula for NPV?

Answer 11

Cash inflows x discount percentage, then add up all the present values - initial cost