D101 WGU FORMULAS

ACTIVITY RATE

Activity Cost Pool Overhead / Total Cost Driver Activity

INVENTORY FLOW

BEGINNING UNITS

+ UNITS ADDED/PURCHASED

- ENDING NITS

= UNITS COMPLETED

CVP EQUATION

Sales Revenue - Variable Costs - Fixed Costs = Profit

CONTRIBUTION MARGIN PER UNIT

SELLING PRICE PER UNIT - VARIABLE COST PER UNIT

CONTRIBUTION MARGIN INCOME STATEMENT

SALES REVENUE

- VARIABLE COSTS

= CONTRIBUTION MARGIN

- FIXED COSTS

= NET INCOME (LOSS)

CONTRIBUTION MARGIN RATIO

VARIABLE COSTS / SALES

BREAKEVEN POINT IN UNITS

FIXED COSTS / CONTRIBUTION MARGIN PER UNIT

BREAKEVEN POINT IN SALES DOLLARS

FIXED COSTS / CONTRIBUTION MARGIN RATIO

TARGET INCOME

(FIXED COSTS + TARGET INCOME) / CONTRIBUTION MARGIN PER UNIT

MARGIN OF SAFETY

CURRENT LEVEL OF SALES

- BREAKEVEN LEVEL OF SALES

OPERATING LEVERAGE

CONTRIBUTION MARGIN / OPERATING INCOME

MATERIALS PRICE VARIANCE

STANDARD PRICE - ACTUAL PRICE

x ACTUAL QUANTITY

(SP-AP) X AQ

MATERIALS QUANTITY VARIANCE

(Standard Quantity Allowed - Actual Quantity Used) × Standard Price

(SQ - AQ) X SP

LABOR RATE VARIANCE

(ACTUAL RATE - STANDARD RATE) X ACTUAL HOURS WORKED

(AR-SR) x AH

LABOR EFFICIENCY VARIANCE

(ACTUAL HOURS - STANDARD HOURS) X STANDARD RATE OF PAY

(AH-SH) X SR

VMOH SPENDING VARIANCE

(ACTUAL ACTIVITY LEVEL X STANDARD OVERHEAD RATE) - ACTUAL OVERHEAD COSTS

VMOH EFFICIENCY VARIANCE

(STANDARD LEVEL OF ACTIVITY ALLOWED - ACTUAL ACTIVITY LEVEL) X STANDARD OVERHEAD RATE

VMOH EFFICIENCY VARIANCE

(STANDARD LEVEL OF ACTIVITY ALLOWED - ACTUAL ACTIVITY LEVEL) X STANDARD OVERHEAD RATE