Management Costing

What is the formula to calculate breakeven in terms of units?

• Sales revenue ÷ fixed costs

• Fixed costs ÷ contribution per unit

• Sales revenue ÷ variable costs

• Fixed costs ÷ sales revenue

How do you calculate breakeven in terms of sales revenue?

• Breakeven in units x selling price

• Variable costs x selling price

• Fixed costs x selling price

• Breakeven in units x fixed costs

What is missing from this formula?

How do you calculate contribution?

• Sales revenue - fixed costs

• Sales revenue

  - variable costs - fixed costs

• Sales revenue

  - variable costs

• Sales revenue

  + variable costs

How do you calculate margin of safety in units?

• Breakeven units x selling price

• Current output – breakeven units

• Breakeven units - fixed costs

• Current output - fixed costs

How do you calculate margin of safety in revenue?

• Sales revenue - variable costs

• MoS in units x breakeven in units

• Selling price x fixed costs

• MoS in units x selling price

How do you calculate maximum order quantity?

• Maximum inventory level - inventory buffer

• Maximum inventory level + inventory buffer

• Re-order level + inventory buffer

• Re-order level - inventory buffer

How do you calculate minimum order quantity?

• Re-order level + inventory buffer

• Maximum inventory level - inventory buffer

• Re-order level – inventory buffer

• Maximum inventory level - re-order level

Fixed costs = £5,000

Selling price : £20

Variable costs :£10

How much is contribution?

Fixed costs = £5,000

Selling price : £20

Variable costs :£10

How many units to breakeven?