Managerial Accounting formulas

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11 Terms

1
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Contribution Margin (CM) formula

Sales − Variable Costs

2
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Contribution Margin Ratio formula

Contribution Margin ÷ Sales

3
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Break-even point in units formula

Fixed Costs ÷ CM per Unit

4
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Break-even point in dollars formula

Fixed Costs ÷ CM Ratio

5
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Variable cost per unit (High-Low Method)

(High Cost − Low Cost) ÷ (High Activity − Low Activity)

6
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Fixed cost formula (High-Low Method)

Total Cost − (Variable Cost per Unit × Activity)

7
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COGS formula

Beginning Inventory + Purchases − Ending Inventory

8
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Total product cost formula

Direct Materials + Direct Labor + Manufacturing Overhead

9
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Operating leverage formula

Contribution Margin ÷ Net Income

10
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Margin of Safety (%) formula

(Margin of Safety ÷ Current Sales) × 100

11
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Weighted Average Contribution Margin per Unit

(CM per Unit × Sales Mix %) + (CM per Unit × Sales Mix %)`