component 1 formulas

Question 1

total revenue

Answer 1

= total quantity sold X selling price

Question 2

profit

Answer 2

= total revenue- total costs

Question 3

total costs

Answer 3

= fixed costs+ variable costs

Question 4

break even

Answer 4

= fixed costs/ selling price- variable cost per unit

Question 5

what is meant by break even

Answer 5

where total revenue = total costs

Question 6

variable costs

Answer 6

variable cost per unit X quantity/ output

Question 7

what are fixed costs

Answer 7

constant

Question 8

total costs

Answer 8

= fixed costs+ variable costs

Question 9

sales revenue

Answer 9

= selling price X quantity

Question 10

contribution per unit

Answer 10

=selling price per unit- variable cost per unit

Question 11

total contribution

Answer 11

= contribution per unit X number of units sold

OR

= total sales - total revenues

Question 12

profit 2

Answer 12

total contribution- fixed costs

Question 13

margin of safety

Answer 13

actual sales- break even level of sales

Question 14

labour turnover

Answer 14

average staff leaving/ average number of staff employed X100

Question 15

labour productivity

Answer 15

total output per period of time/ average number of employees per period of time

Question 16

absenteeism

Answer 16

total number of staff absence days over a year/ total number of working days that should have been worked X100

Question 17

whats the average staff turnover

Answer 17

15%

Question 18

market share

Answer 18

sales of a business/ total sales in a market X 100

Question 19

net cash flow

Answer 19

income- expenditure ( inflows- outflows)

Question 20

opening balence

Answer 20

same as closing balence of previous month

Question 21

closing balence

Answer 21

opening balence+ net cash flow

Question 22

added value

Answer 22

sales revenue- cost of goods sold

Question 23

cost of sales

Answer 23

opening inventories + purchases - closing inventories

Question 24

gross profit

Answer 24

sales reveneue - cost of sales

Question 25

net profit def

Answer 25

profit that belongs to the sole trader following a reduction of all expenses from the gross profit. the sole trader has to pay income tax on this profit

Question 26

net profit formula

Answer 26

gross profit -expenses

Question 27

gross profit margin

Answer 27

%=gross profit/sales revenue X100

Question 28

net profit margin

Answer 28

%=net profit/ sales(rev) X100

Question 29

turnover

Answer 29

COS +gross profit

Question 30

gross profit margin def

Answer 30

measures the proportion of money left over from revenues after accounting for the cost of goods sold

If the Gori’s profit margin is 30% this means that the business’s cost of sales are 70% of its turnover because turnover equals cost of sales plus gross profit

Question 32

Net profit Margin def

Answer 32

Measures how Much out of every pound of sales a company actually keeps in earnings

Question 33

Operating profit margin

Answer 33

Operating profit/ SalesX100

Question 34

variance

Answer 34

budgetted figure- actual figure