Formuals Flashcards
Total fixed cost
fixed cost x units
Total variable cost
variable cost per x units
Total cost
Total fixed + Total variable cost
Breakeven unit
total fixed costs /
selling price – variable
Sales Breakeven units
BE units x selling price
contribution sales ratio ( GP margin )
Contribution / Sales x 100
Contribution selling price per unit
Selling price — variable cost
contribution sale ratio back to BE
Fixed cost / contribution sales ratio
Contribution
sales - variable cost
To figure out what’s limited
1 know what’s limited
2 calculate contribution per unit
3 Identify contribution earned by each product per unit of limiting factor (e.g. per labour hour worked)
- Determine optimal contribution plan (rank)
to figure out what’s limited
To get Target profit
Fixed + Required profit / contribution unit
For target Revenue
Target units x selling price
Margin of safety unit
Expected sale — Breakeven unit
MARGIN OF SAFETY percentage
Actual sales - breakeven sales
———————————-
Actual sales x100
Contribution per unit
Sales value -variable cost
