Formulas Flashcards
Variable cost
(Total cost of high activity – Total cost low activity)
/
(Highest activity unit – Lowest activity unit)
Total cost
(Variable cost per unit x Units produced) + Total fixed cost
Break-even point in units sold
Total Fixed cost / Contribution per unit
Contribution per unit
Selling price per unit - Variable cost per unit
Contribution Margin (CM) Ratio
Contribution per unit / Selling price per unit
Degree of Operating Leverage
Contribution / EBIT
EBIT
contribution - fixed cost
Material price variance
(AP – SP) x AQ
AP = Actual Price per unit of material.
SP = Standard Price per unit of direct material.
AQ = Actual Quantity of material purchased.
Actual price > standard price: unfavorable.
Actual price < standard price: favorable.
Material quantity variance
(AQ – SQ) X SP
AQ = Actual Quantity of material used.
SQ = Standard Quantity of material allowed.
SP = Standard Price of material.
Actual quantity > standard quantity: unfavorable.
Actual quantity < standard quantity: favorable.
Sales Price Variance
(ASP – SSP) X Actual Units sold
ASP = actual selling price
SSP = standard selling price
sales volume variance
(ASQ – SSQ) X Standard profit per unit or contribution per unit
ASQ = actual selling quantity
SSQ = standard selling quantity
Labour rate variance
(SR – AR) x AH
SR = Standard Rate per hour
AR = Actual Rate per hour
AH = Actual Hours Taken
Labour Cost variance
(SH x SR) – (AH x AR)
SH = Standard Hours for actual output
SR = Standard Rate per hour
AH = Actual hours
AR = Actual Rate per hour
