Formulas Flashcards
Turnover ratio
Sales/Operating assets
EVA
OI-WACC*Capital
Gross Margin
Operating income/Sales
Value added activity
SQ*SP
Fixed activity rate = SP
SP = FC/Capacity
Non value added activity
(AQ-SQ)*SP
Three measures of unused capacity
SP*SQ
SP*AQ
SP*AU
Direct materials
Beg. Bal. Raw materials + Raw. materials purchased - End Bal. Raw materials
Prime cost
Direct materials + Direct labor
Overhead
Indirect costs (That are relevant for the production e.g. utilities, insurance or rent)
Conversion cost
Direct Labor + Overhead
COGM
DM + DL + OH + dWork in Progress
COGS
COGM + dEnding balance finished goods
High-low
(High cost - Low cost) / (High purchase orders - Low purchase orders)
FC
=TC-Var rate * X
Operating Leverage
Total contribution margin / Operating income
ROI
Operating income / Operating assets
Absorption-Costing (full costing) ending inventory
Unsold units * Unit cost (with fixed OH, i.e. absorbs some of the fixed manufacturing costs in addition )
Variable costing (direct costing) unit cost
Unsold units * Unit cost (less fixed OH)
Residual income
OI - Minimum rate of return * Operating assets
Operating income
Revenues - COGS - Operating expenses
Contribution margin
(P-VC)*Units
Break-Even (units)
FC/(P-VC)
Target Profit (units)
(FC+TP)/(P-VC)
Overhead rate
Overhead costs/Unit-level Driver (e.g. DL hours)
