Formulas Flashcards
Return on investment
ROI = profit/ invested capital
Or
ROI = return on sales x investment turnover
Residual Income
RI = profit - (invested capital x imputed interest rate)
Economic Value Added
EVA = net operating profit after tax - (capital employed x WACC)
Labour Productivity
= number of units produced/ number of direct labour hours
Total factor productivity
= number of units produced/ cost of all inputs in production
Return on Sales
= Profit/ Sales revenue
Price Variance
( Actual price of input - budgeted price of input ) x Actual quantity of input
Efficiency Variance
( Actual quantity of input used - budgeted quantity of input allowed for actual output ) x Budgeted price of input
Direct Material Price Variance
Purchased Quantity ( Actual Price - Standard Price )
Direct Material Quantity Variance
Standard Price ( Actual Quantity - Standard Quantity allowed, given actual output )
Direct Labour Rate Variance
Actual Hours used ( Actual Rate per hour - Standard Rate per hour )
Direct Labour Efficiency Variance
Standard Rate per hour ( Actual Hours used - Standard Hours allowed, given actual output )
Predetermined Overhead Rate
Budgeted manufacturing overhead / budgeted volume of direct labour hours
Unit cost
Direct materials + Direct labour + Manufacturing overhead
Re-order Point
(Inventory used per period x order lead time) + safety stock (where applicable)
