Mod 47 Formulas

Question 1

Contribution margin ratio

Answer 1

CMR = (SP - VC)/SP

Question 2

Break event point units equation 2

Answer 2

BEPunits = total fixed costs/(CM/unit)

BEPunits = total fixed costs + Before tax profit/(CM/unit)

Question 3

Break even point sales $ equation

Answer 3

BEPsales$ = total fixed costs/CMR

BEPsales$ = (total fixed costs + before tax profit)/CMR

Question 4

Before tax profit equation

Answer 4

Before tax profit = after tax profit/(1-tax rate)

Question 5

Margin of Safety equation (in units or $s)

Answer 5

MOS = Current sales level - BEP

Question 6

Contribution margin/unit equation

Answer 6

CM/unit = net income/margin of Safety in Units

Question 7

Contribution margin ratio

Answer 7

CMR = net income/margin of Safety in $

Question 8

Variable/Direct Costing Income Statements

Answer 8

Sales
- Variable COGS
= manufacturing CM
- Variable Selling and G+A
= contribution margin
- total fixed costs
= net income

Question 9

Contribution margin equation

Answer 9

CM = SP - VC

Question 10

Flexible budget formula

Answer 10

Budgeted OH = total fixed costs + (# HRs)(Variable OH Rate/HR)

Question 11

What are the names of the variances between AQpur/used x AP and AQ and SP? 4

Answer 11

1 DM Purchase Price Var
2 DM Price var
3 DL rate var
4 variable OH spending var

Question 12

What are the names of the variable OH variances between AQ x SP and SQ x SP? 3

Answer 12

1 DM Quantity/Usage Var
2 DL efficiency/usage var
3 Variable OH Efficiency Variance

Question 13

What are the names of the Fixed OH variances between AQ X AP and budget? 2

Answer 13

1 fixed OH spending variance

2 fixed OH budget variance

Question 14

What is the name of the fixed OH variance between, budget and SQ X SP?

Answer 14

Production/volume variance

Question 15

What is the name of the variance between AQ x AP and FOH Budget + VAR (AQ x SP)?

Answer 15

OH Spending/Budget Variance

Question 16

What is the name of the variance between FOH Budget +

VAR (AQ X SP) and FOH Budget + VAR (SQ x SP)?

Answer 16

OH efficiency variance

Question 17

What is the difference between OH Spending/Budget Variance and OH Efficiency Variance?

Answer 17

Controllable Variance

Question 18

What is the variance between FOH Budget + VAR (AQ x SP) and SQallowed x SP?

Answer 18

Production/Volume Variance