formulas

Question 1

total costs

Answer 1

Fixed costs + Variable costs

Question 2

profit

Answer 2

Total revenue - Total costs
OR Total contribution - Fixed costs

Question 3

Total variable costs

Answer 3

Variable cost per unit × Number of units sold

Question 4

Sales revenue or Turnover

Answer 4

Selling price per unit × Number of units sold

Question 5

In a decision tree Net gain

Answer 5

Expected value - Initial cost of decision

Question 6

average costs per unit

Answer 6

Total Production Costs ÷ Total Output (Units)

Question 7

Net Present Value

Answer 7

Cash flow x Discount Factor (Predicted rate of Inflation)

Question 8

Average Rate of Return

Answer 8

Net Return (Profit per annum) ÷ Capital Outlay Cost (start cost) x 100

Question 9

Payback Period

Answer 9

Costs of Project (Investment) ÷ Net Cash Flow Generated x 12

Question 10

Revenue

Answer 10

Selling Price x Units Sold

Question 11

Gearing

Answer 11

Non-current Liabilities ÷ (Total Equity + Non-current Liabilities) x 100

Question 12

Acid Test Ratio

Answer 12

(Current Assets - Inventories) ÷ Current Liabilities

Question 13

Current Ratio

Answer 13

Current Assets ÷ Current Liabilities

Question 14

Return On Capital Employed

Answer 14

Operating Profit ÷ (Total Equity + Non-current Liabilities) x 100

Question 15

Labour Productivity

Answer 15

Output in period (units) ÷ Number of Employees Working

Question 16

Labour Retention

Answer 16

Staff not leaving per year ÷ Average Number of Staff x 100

Question 17

Labour Turnover

Answer 17

Number of Employees leaving during the period ÷ Average number employed during the period x 100

Question 18

Absenteeism

Answer 18

Number of days of unauthorised absence ÷ Total Days worked by workforce over the period x 100

Question 19

Total Float Time

Answer 19

LFT - EST - Duration of Activity

Question 20

breakeven

Answer 20

total fixed costs / contribution per unit

Question 21

capital productivity

Answer 21

output per time period / no. machines

Question 22

capacity utilisation

Answer 22

actual output / max output x100

Question 23

productivity

Answer 23

output per time period / input per time period

Question 24

working capital

Answer 24

current assets - current liabilities

Question 25

contribution

Answer 25

selling price - variable cost per unit

Question 26

total contribution

Answer 26

contribution per unit x no.units sold

Question 27

margin of safety

Answer 27

total output - breakeven output

Question 28

average total cost

Answer 28

total cost x quantity

Question 29

average variable cost

Answer 29

total variable cost x quantity