BMGT221 - Equations: Exam 1

contribution margin (CM) =

sales - VC

operating income (profit) = ______ - _____ - _____

sales - VC - FC

operating income (profit) = _________ - ________`

CM - FC

operating income (profit) = (_____ - _____) x ____ - _____

(SP - VCU) x Q - FC

operating income (profit) = _____ x ___ - ______

CMU x Q - FC

contribution margin ratio (CM ratio) =

CM / sales

variable expense ratio =

variable expenses / sales

CM ratio + variable expense ratio =

1

profit =

(CM ratio x sales) - FC

△ in profit = ________ - _______

change in CM - change in FC

△ in profit = (______ x ______) - _______

(CM ratio x change in sales) - change in FC

break-even units (BEQ) =

FC / CMU

break-even sales = ______ x _____

BEQ x SP

break-even sales = ______ / ______

FC / CM ratio

targeted unit sales (Q) =

target profit + FC / CMU

targeted profit =

CMU x Q - FC

margin of safety ($) =

total sales - BE sales

margin of safety (units) =

total units sold - BEQ

margin of safety (%) =

MOS($) / total budgeted sales

degree of operating leverage (DOL) =

CM / P

△ in CM =

CM ratio x change in sales

profit_impact =

profit_new - profit_old

% △ in net operating income =

DOL x % change in sales

prime costs =

DM + DL

conversion costs =

DL + MOH

total cost =

FC + (VCU x Q)

total manufacturing costs =

DL + DM + MOH applied

gross profit (GP) =

sales - COGS

operating income (OI) =

gross profit - SGA

MOH applied =

POHR x actual base of job

predetermined overhead rate (POHR) =

estimated total MOH / estimated total allocation base

departmental POHR =

estimated total MOH of department / estimated total allocation base of department

raw materials t-account

Dr: purchases; Cr: DM, IM

work in process t-account

Dr: DL, DM, MOH applied; Cr: COGM

finished goods t-account

Dr: COGM; Cr: COGS

MOH t-account

Dr: IM, IL, other; Cr: applied