Costing

Question 1

What is the formula for - Minimum Inventory Level(Buffer)?

Answer 1

Re-Order Level-(Average Usage x Average Lead Time)

Question 2

What is the Formula for Maximum Inventory Level

Answer 2

Minimum Inventory Level + Re-Order Quantity

Question 3

What is the Formula for Re-order Quantity

Answer 3

Maximum Inventory Level - Minimum Inventory Level

Question 3

What is the Formula for Re-Order Level?

Answer 3

(Maximum Usage x Maximum Lead Time)+ Minimum Inventory Level.

Question 4

What is the formula for Economic Order Quantity (EOQ)

Answer 4

2 x Cost of Ordering x Demand / Holding Cost. and then square root your answer. (2 Cod & Chips)

Question 5

Overhead Absorption Rate

Answer 5

Total Budgeted Overheads / Total Planned Units/Work (could be labour hours/machine hours aswell as units)

Question 6

What is the formula to work out Contribution

Answer 6

Selling Price - Variable Costs

Question 7

What is the Formula for Break Even Point

Answer 7

Fixed Costs / Contribution Per Unit

Question 8

What is the formula for Margin of Safety in Units

Answer 8

Current Output - Break Even Output

Question 9

What is the formula to work out Break Even Point in Sales Revenue

Answer 9

Break Even Point in Units x Selling Price

Question 10

What is the Formula for Margin of Safety in %

Answer 10

Current Output - Break Even Output / Current Output x 100

Question 11

What is the Formula for Target Profit

Answer 11

Fixed Costs + Target Profit / Contribution Per Unit

Question 12

What is the formula for Contribution Sales Ratio (CS)

Answer 12

Contribution /Selling Price

Question 13

What is the Formula for the break even point in sales revenue using the Contribution Sales Ratio (CS)

Answer 13

Fixed Costs / CS Ratio

Question 14

What is the Formula for Inventory Holding Days

Answer 14

Inventory / Cost of Sales (COS) x 365

Question 15

What is the Formula for Trade Receivable Days

Answer 15

Trade Receivables / Revenue * 365

Question 16

What is the Formula for Trade Payable Days

Answer 16

Trade Payable’s / Cost of Sales * 365

Question 17

What is the formula for Working Capital Cycle

Answer 17

Inventory Holding Days + Receivables - Payable’s

Question 18

What is the Lookup Value on a Vlookup Formula

Answer 18

The Item/Subject/Value we are looking up

Question 19

What is the table Array on a Vlookup Formula

Answer 19

The Table/Range of Data you will be doing a lookup against

Question 20

What is the Column Index Number on a Vlookup Formula

Answer 20

The collumn of the table you will be using the lookup for

Question 21

What is the Range Lookup on a Vlookup Formula

Answer 21

This will either be a true or false, false will give you an exact value where as if you put true it would not

Question 22

What is a logical test on an IF Formula

Answer 22

The Logical Test is the test your doing ie if one value is bigger than another value

Question 23

What is the Value if True on an IF Statement

Answer 23

This is what you want the if formula to say if the logical test is true

Question 24

What is the Value if False

Answer 24

This is what you want the if formula to say if the logical test you are doing is false