Theme 2 Calculations

Question 1

Average variable cost

Answer 1

Total variable costs
—————————
Sales volume

Question 2

Sales volume

Answer 2

Total sales
——————
Price per unit

Question 3

Sales revenue

Answer 3

Price per unit x quantity sold

Question 4

Break even

Answer 4

Total fixed costs
————————
Contribution

Question 5

Total costs

Answer 5

Fixed costs + variable costs

Question 6

Contribution

Answer 6

Selling price of a good - variable cost of a good

Question 7

Margin of safety

Answer 7

Current sales level - breaks even point
—————————————-x100
Current sales level

Question 8

Operating profit

Answer 8

Gross profit - operating expenses

Question 9

Net profit

Answer 9

Operating profit - interest

Question 10

Gross profit margin

Answer 10

Gross profit
—————— x100
Revenue

Question 11

Operating profit margin

Answer 11

Operating profit
——————— x100
Revenue

Question 12

Net profit margin

Answer 12

Net profit
———— x100
Revenue

Question 13

Current ratio

Answer 13

Current assets
———————
Current liabilities

Question 14

Acid test ratio

Answer 14

Current assets - inventories
—————————————
Current liabilities

Question 15

Capacity utilisation

Answer 15

Current output
——————— x100
Max possible output

Question 16

Productivity

Answer 16

Total output
————————-
Number of workers

Question 17

Unit costs

Answer 17

Total cost
—————
Total output

Question 18

Operating expenses

Answer 18

Fixed costs

Question 19

Cost of sales

Answer 19

Variable costs

Question 20

Gross profit

Answer 20

Total revenue - cost of sales

Question 21

Closing balance

Answer 21

Net cash flow + opening balance

Question 22

Average cost

Answer 22

Total cost
—————
Output

Question 23

Profit for the year

Answer 23

Operating profit +- interest

Question 24

Working capital

Answer 24

Current assets - current liabilities

Question 25

Profit for year after tax

Answer 25

Profit for the year- tax