Formulae

Question 1

Average cost

Answer 1

Total cost of production ÷ Number of units produced

Question 2

Break-even formula

Answer 2

Fixed cost ÷ Contribution per unit

Question 3

Capacity utilisation rate

Answer 3

Capacity output level ÷ Maximum output level × 100

Question 4

Closing cash balance

Answer 4

Opening cash balance + (Cash inflows - Cash outflows)

Question 5

Labour productivity

Answer 5

Total output in a given time period ÷ Total workers employed

Question 6

Margin of safety

Answer 6

Break-even level of output - current output level

Question 7

Market capitalisation

Answer 7

Current share price × Total number of shares

Question 8

Production over break-even point (%)

Answer 8

Margin of safety ÷ Break-even output

Question 9

Profit

Answer 9

Contribution - overheads

Question 10

Revenue

Answer 10

Selling price × Quantity sold

Question 11

Total contribution

Answer 11

Unit contribution × Output

Question 12

Unit contribution

Answer 12

Price of unit - Direct(variable) cost of unit

Question 13

Working capital

Answer 13

Current assests - Current liabilities

Question 14

Cost of sales

Answer 14

(Opening inventory+ purchases) - closing inventories

Question 15

gross profit

Answer 15

Revenue - Cost of sales

Question 16

Market share %

Answer 16

Sales of the business ÷ total market sales × 100