formula and key data

Question 1

what is the calculation for total costs?

Answer 1

Fixed costs+ variable costs

Question 2

what is profit?

Answer 2

Total revenue- Total costs OR Total contribution - fixed costs

Question 3

(total) variable costs

Answer 3

variable costs per unit x number of units sold

Question 4

Total revenue

Answer 4

selling price per unit x number of units sold

Question 5

market capitalisation of a business

Answer 5

number of issued shares X current share price

Question 6

decision net gain=

Answer 6

expected value- initial cost of decision

Question 7

what does market size mean?

Answer 7

the quantity/ volume of goods and services produced in a particular market over a period of time

Question 8

market size=

Answer 8

the total sales revenue generated from selling all the goods and services produced in a particular market over a period of time

Question 9

what is sales volume?

Answer 9

quantity of goods and services produced by a particular business over a period of time

Question 10

what is sales value?

Answer 10

total sales revenue of a particular business over a period of time

Question 11

market growth (%) in a year=

Answer 11

change in sixe of the market between year (x-1) and year x/ size of the market in year (x-1) x 100

Question 12

sales growth (%) in year X=

Answer 12

change in sales of product or business between year(x-1)and year x/ sales of product or business in a year (x-1)

Question 13

market share (%)=

Answer 13

sales of one product or brand or business/ total sales in the market x 100

Question 14

price elasticity of demand=

Answer 14

percentage change in quantity demand / percentage change price

Question 15

what is the ranges for price inelastic and elastic

Answer 15

inelastic demand= 0 to -1 elastic demand= -1 to infinite

Question 16

added value=

Answer 16

sales revenue- cost of bought items or goods and services

Question 17

labour productivity=

Answer 17

output per time period / number of employees

Question 18

unit cost (average costs)=

Answer 18

total costs of production / number of units of output produced

Question 19

capacity utilisation (%)=

Answer 19

actual output in a given time period / maximum possible output in a given time period

Question 20

return on investment (%)=

Answer 20

return on investment(£) / cost of investment x 100

Question 21

Gross profit=

Answer 21

sales revenue- cost of sales

Question 22

operating profit (profit from operations)

Answer 22

sales revenue- cost of sales- operating expenses

Question 23

profit for year=

Answer 23

operating profit+ profit from other activities- Net finance costs- tax

Question 24

variance=
favourable variance=
Adverse variance=

Answer 24

difference between an actual and a budgeted figure.
profits being higher than forecast
profits being lower than forecast

Question 25

contribution per unit=

Answer 25

selling price- variable cost per unit

Question 26

total contribution=

Answer 26

contribution per unit x units produced/ sold OR | total revenue- total variable costs

Question 27

break- even output=

Answer 27

fixed costs/ contribution per unit

Question 28

what is break-even?

Answer 28

the point at which the total revenue and total costs equal the same, making profit 0

Question 29

margin of safety=

Answer 29

actual level of output- breakeven level of output

Question 30

Gross profit margin=

Answer 30

gross profit/ sales revenue x 100

Question 31

profit from operations margin= operating profit margin %=

Answer 31

operating profit/ sales revenue x 100

Question 32

profit for year margin (%)=

Answer 32

profit for year/ sales revenue x 100

Question 33

labour turnover (%)=

Answer 33

number of staff leaving during the yea/ average number of staff employed by the business during the year x 100

Question 34

employee retention rate (%) for a particular time period=

Answer 34

number of employees at end of period (number of leavers) / number of employees at end of period x 100

Question 35

employee cost as a percentage of turnover=

Answer 35

employee costs/ sales turnover x 100

Question 36

labour cost per unit=

Answer 36

labour costs/ units of output