Unit 5 - Finance

Question 1

Contribution

Answer 1

Contribution = selling price per unit - variable costs per unit

Question 2

Variance

Answer 2

Variance = Actual - budget

Question 3

Total contribution

Answer 3

Total contribution = contribution per unit x number of units sold

Question 4

Break even

Answer 4

Break even = fixed costs / contribution per unit

Question 5

Margin of safety

Answer 5

Margin of safety = actual sales - break even level of sales

Question 6

Gross profit

Answer 6

Gross profit = sales revenue - costs of sales

Question 7

Gross profit margin

Answer 7

Gross profit margin = (gross profit / sales revenue) x 100

Question 8

Operating profit

Answer 8

Operating profit = gross profit - expenses

Question 9

Operating profit margin

Answer 9

Operating profit margin = (operating profit / sales revenue) x 100

Question 10

Profit for the year margin

Answer 10

Profit for the year margin = (profit for the year / sales revenue) x 100

Question 11

ROI

Answer 11

ROI = (operating profit / capital employed) x 100

Question 12

Net cash flow

Answer 12

Net cash flow = total inflows - total outflows

Question 13

Closing balance

Answer 13

Closing balance = opening balance + net cash flow