management formulas

Question 1

closing inventory

Answer 1

opening inventory + purchases - issues of inventory

Question 2

semi varibale closts

Answer 2

y = a + b x

y semi variable costs
a fixed costs
b variable cost
x number of units

Question 3

Overhead absorbtion rate

Answer 3

absorption basis

Question 4

Predetermined Overhead Rate

Answer 4

estimated units in allocation basis

Question 5

how to work out overhead applied (incorporating POHR)

Answer 5

POHR * actual activity

Question 6

contribution

Answer 6

selliung price - variable cists

Question 7

breakeven point

Answer 7

total fixed costs/contribution per unit

Question 8

margin of safety units

Answer 8

budgeted sales units - breakeven sales unit

Question 9

margin of safety %

Answer 9

(budgeted sales unit - breakeven sales unit)/ budgeted sales unit

Question 10

profit (using MoS)

Answer 10

margin of safety% * contribution

Question 11

margin

Answer 11

profit / (cost of sales +profit)
OR
profit/sales
OR 
(price-cost)/price

Question 12

markup

Answer 12

profit/(sales-profit)
OR
profit/cost of sales

Question 13

gross profit

Answer 13

sales - cost

Question 14

current ratio

Answer 14

current asset/current liabiltieis

Question 15

quick/liquidity/acid ratio

Answer 15

(Current asst- Inventories)/ current liabilties

Question 16

inventory turnover period

Answer 16

inventory/cosy of sales

*365

Question 17

Rate of Inventory turnover period

Answer 17

cost of sales/average inventory

Question 18

Recievables collection period (days)

Answer 18

average recievables/annual sales revenue

*365

Question 19

payables collection period

Answer 19

average payables/annual purchases

*365

Question 20

materials price variance

Answer 20

Actual quantity ( actual price - stamndard price )

Question 21

Materials quantity variance

Answer 21

stnadard price( actual; quantity - standatd quantity)

Question 22

labour rate variance

Answer 22

actual hours ( actual rate - stamdard rate)

Question 23

labour efficency variance

Answer 23

standard rate (actual hours- standard hours)

Question 24

variable overhead spending variance

Answer 24

actual hours (actual rate- standard rate)

Question 25

variable overhead efficency variance

Answer 25

standard rate (actual hours - standard hours)

Question 26

return on investment

Answer 26

operating profit / average operating assets

Question 27

Residual icnome

Answer 27

controllable divisonal profit x

imputed interest cost of capital (x)