BEC Formulas

Question 1

Direct Materials Used

Answer 1

Beg DM
+DM Purchase
-Ending DM

Question 2

Manufacturing Costs Incurred

Answer 2

Materials Used
+DL
+Overhead Applied

Question 3

COGM

Answer 3

Beg WIP
+Total Manufacturing Costs Incurred
-End WIP

Question 4

COGS

Answer 4

Beg FG
+COGM
-End FG

Question 5

ROI

Answer 5

Net Income/ Average Investment Capital

Or

Profit Margin X Investment Turnover

Question 6

Profit Margin

Answer 6

Net income/Sales

Question 7

Investment Turnover

Answer 7

Sales/ total assets or total capital

Question 8

Return on Assets

Answer 8

Net Income/ Average total assets

Question 9

Return on Equity

Answer 9

Net Income/ Average total equity

Question 10

DuPont

Answer 10

Net Profit Margin X Asset Turnover X Financial Leverage

Question 11

Asset Turnover

Answer 11

Sales/ Average Total Assets

Question 12

Financial Leverage

Answer 12

Average Total Assets/ Average Total Equity

Question 13

Extended Dupont

Answer 13

Tax Burden X Interest Burden X Operating Income Margin X Asset Turnover X Financial leverage

Question 14

Tax Burden

Answer 14

Net Income/ Pretax Income

Question 15

Interest Burden

Answer 15

Pretax Income/ EBIT

Question 16

Operating Income Margin

Answer 16

EBIT/ Sales

Question 17

Residual Income

Answer 17

Net income - Required Return*

(NBV x Hurdle Rate)

Question 18

Economic Value Added

Answer 18

EBIT X (1-T) - Required Return

Question 19

Predetermined OH Rate

Answer 19

Budgeted Overhead Costs/ Estimated total DL hours

Question 20

FIFO Equivalent Units

Answer 20

Beg Units X (1-% Complete)
+Units Completed
-Beg Units
+End WIP x % Complete

Question 21

FIFO Cost Per Equivalent Unit

Answer 21

Current Costs Only/ Equivalent Units

Question 22

Weighted Average Cost per Equivalent Unit

Answer 22

Beginning Cost + Current Cost/ Equivalent Units

Question 23

Weighted Average

Answer 23

Units Completed
+End WIP X % completed

Question 24

DOL

Answer 24

% Change EBIT/ % Change Sales

Question 25

DFL

Answer 25

% Change EBT or EPS/ % Change EBIT

Question 26

Times Interest Earned

Answer 26

EBIT/ Interest Expense

Question 27

Equity Multiplier

Answer 27

Total Assets/ Total Equity

Question 28

Cash conversion cycle

Answer 28

Days in Inventory + Days Sales in AR - Days of Payables Outstanding

Question 29

Inventory Turnover

Answer 29

COGS/ Average Inventory

Question 30

Days in Inventory

Answer 30

EI/(COGS/365)

Question 31

AR Turnover

Answer 31

Sales/Average AR

Question 32

Days sales in AR

Answer 32

Ending AR/(Sales/365) OR (Ending AR/Sales) X # Days in the Period

Question 33

AP Turnover

Answer 33

COGS/ Average AP

Question 34

Days Payables Outstanding

Answer 34

Ending AP/ (COGS/365)

Question 35

Working Capital Turnover

Answer 35

Sales/ Average Working Capital

Question 36

Reorder Point

Answer 36

Safety Stock + Lead Time x Sales during lead time

Question 37

EOQ

Answer 37

sqrt(2 X Annual Sales in units X Cost per Purchase Order/ Annual Carrying Cost per unit)

Question 38

APR Quick payment discount

Answer 38

(360/Pay period - Discount Period) X (Discount/ 100-%)

Question 39

Constant Growth Dividend Discount

Answer 39

Dividend 1 year after X (1+ Growth)/(Required Return - Growth)

Question 40

Price Earnings Ratio

Answer 40

Stock Price Today/ EPS expected in 1 year

Question 41

Trailing PE Ratio

Answer 41

Stock Value today/ EPS for past year

Question 42

PEG Ratio

Answer 42

(Stock price today/Expected EPS)/ (100 x Expected Growth rate)

Question 43

Current Price of Stock (Using PEG)

Answer 43

PEG x Expected EPS x Growth or (G x 100)

Question 44

Price to Sales

Answer 44

Stock Price Today/ Expected Sales in One year

Question 45

Current price of stock

Answer 45

Price to Sales X Expected sales in 1 year

Question 46

Price to Cash flow

Answer 46

Stock Price/ Expected cash flow in one year

Question 47

Current price of Stock using P/CF

Answer 47

PCF X Expected cash flow in one year

Question 48

Price to Book Ratio

Answer 48

Stock Price/ BV Common Equity today

Question 49

NPV

Answer 49

After Tax Cash Flow + Depreciation x Tax rate X PV -Initial Cash flow

Question 50

Profitability Index

Answer 50

PV CF/ Cost of initial investment

Question 51

Payback period

Answer 51

Net initial investment/ Average Incremental cash flow (cash flow per period is even)

Question 52

PV factor

Answer 52

1/(1+R)^n

Question 53

PV Factor of Annuity

Answer 53

1-PV Factor/R

Question 54

Economic Return %

Answer 54

Dividend + change in stock price/ Initial investment

Question 55

Free Cash Flow

Answer 55

NI + Noncash Expense - Increase in WC - Capital Expenditures

Question 56

Intangible Asset income approach

Answer 56

Expected FCF X Discount

Question 57

Intangible asset cost method (NBV)

Answer 57

Original Cost to Buy - AD

Question 58

Intangible asset replacement cost

Answer 58

Cost to replace + Assembly + Transportation

Question 59

Prime Cost

Answer 59

DL + DM

Question 60

Conversion Cost

Answer 60

DL + OH Applied

Question 61

Sales Value at Split off

Answer 61

Final Selling price - identifiable cost incurred after split off

Question 62

Total Factor productivity

Answer 62

Output/Total Cost

Question 63

Partial Productivity

Answer 63

Output/Specific Quantity of material or labor

Question 64

Variable cost per unit (High-low method)

Answer 64

Highest total cost - lowest total cost/ highest volume - lowest volume

Question 65

Variable cost

Answer 65

Highest or lowest volume x Variable cost per unit

Question 66

Fixed Costs

Answer 66

Total costs - Variable Costs

Question 67

Absorption Costing

Answer 67

Revenue -COGS Gross Margin -Operating Expenses Net Income

Question 68

Variable/Contribution/Direct

Answer 68

Revenue -Variable Costs Contribution Margin -Fixed cots Net Income

Question 69

Contribution Margin

Answer 69

Revenue - Variable costs

Question 70

Unit Contribution Margin

Answer 70

Unit sales price - variable cost per unit

Question 71

Contribution Margin Ratio

Answer 71

CM/Revenue

Question 72

Controllable Margin

Answer 72

CM - Controllable Fixed costs

Question 73

Fixed Costs per Unit

Answer 73

Fixed MOH/Units produced

Question 74

Breakeven point

Answer 74

Total Fixed Costs/ Unit CM

Question 75

Breakeven point ($)

Answer 75

Unit price x breakeven point (units)

Question 76

Breakeven point ($)

Answer 76

Total fixed costs/ CM ratio

Question 77

Target profit (units)

Answer 77

Fixed costs + pretax profit/ Unit CM

Question 78

Target sales ($)

Answer 78

Variable costs + Fixed Costs + Pretax profit OR Fixed Costs + Pretax Profit/ CM Ratio

Question 79

Sales price per unit

Answer 79

Fixed Costs + Variable Costs + Pretax Profit/ # Units sold

Question 80

Margin of safety

Answer 80

Total sales - Breakeven sales

Question 81

Margin of safety %

Answer 81

Margin of safety/ total sales

Question 82

Budgeted Production

Answer 82

Budgeted Sales + Desired EI- Beg Inventory