Equations Flashcards
Total variable cost
Variable cost per unit x No. units sold
Variable cost per unit = Variable cost / No. units
Market size
Volume = No. good sold in 1 year
Value = Value of goods sold in 1 year
Value added
Revenue - cost of goods
Capacity utilisation
Output in given time / Max possible output x 100%
Labour productivity
Output per time / No. employees
PED
And when is it elastic / inelastic?
% change in demand / % change in price x100
-1<x<0 = inelastic
x<-1 = elastic
Gross profit
Revenue - cost of sales
Operating profit
Revenue - cost of sales - operating expenses
Operating Profit = Money left after operating costs but before tax
Variance
Difference between actual and budgeted figure
Contribution (2 equations)
Revenue - Variable costs
OR
Contribution per unit x No. units
Contribution = Portion of revenue that contributes to the coverage of fixed costs.
Break even output
Fixed costs / Contribution per unit
Break even output = Level of output to achieve break even
Profit for year margin
Profit for year / revenue x 100
Margin of safety
Actual level of output - Breakeven level of output
Gross profit margin
Gross profit / Sales revenue x 100
Labour turnover OR employee retention rate
NO. leaving / average NO. employed x 100
