formulas

Question 1

How is annual sales measured

Answer 1

• Quantity sold x selling price

Question 1

how to find market share

Answer 1

sales of business/ sales of entire industry x 100%

Question 1

productivity formula

Answer 1

no. output/ no. input

Question 2

labor productivity formula

Answer 2

no. output/ no. employees

Question 3

define revenue & formula

Answer 3

-money from selling goods/ services
units sold x selling prices

Question 4

formula for profit

Answer 4

-revenue - total cost
-margin of safety x unit contribution

Question 5

define variable cost & formula

Answer 5

cost that varies directly with no. items sold
no. units x vc per unit
eg. textbooks for students, raw materials

Question 6

define total cost & formula

Answer 6

-fc and vc combined
-fixed cost + variable cost
-avg cost x output

Question 7

define contribution & formula

Answer 7

-value added to product
-vc + profit
(not profit)
unit contribution:
-selling price - variable cost per unit

Question 8

define margin of safety & formula

Answer 8

-no. units that exceed break even level of output
no. units sold - break even point level of output

Question 9

define break even level of output

Answer 9

no. units that must be sold for total cost = total revenue
-total fc/ unit contribution

Question 10

define break even point & formula

Answer 10

-when total cost = total revenue ( no profit or loss)
fc/ unit contribution