DP2 calculations review

Costs & revenues

100

Price x quantity sold

Calculate sales revenue (total revenue)

200

Total fixed costs / contribution per unit

Calculate the break-even quantity (point)

300

Current output - break-even quantity

Calculate the margin of safety

400

(Total fixed costs + target profit) / contribution per unit

Calculate the target profit

500

Sales revenue - total variable costs

Calculate total contribution

Final accounts

100

Total cash inflows - total cash outflows

Calculate net cash flow

200

Sales revenue - cost of sales

Calculate gross profit

300

Gross profit - expenses

Calculate profit before interest & tax (operating profit)

400

Opening stock + Purchases of stock - Closing stock

Calculate cost of sales

500

(Remaining investment balance / Cash flow in the year payback is achieved) x 365

Calculate the Payback period in days

Operations & marketing

100

(Sales of McDonald's / Total sales in the fast food market) x 100

Calculate market share

200

Stock + Debtors + Bank + Cash

Calculate current assets

300

Current assets - current liabilities

Calculate working capital (net current assets)

400

[Number of employees who leave / Average number of employees] x 100

Calculate labour turnover

500

LFT - duration - EST (HL)

Calculate the total float 

Mystery (HL)

100

Budgeted value - actual value (HL)

Calculate a budget variance

200

Maximum stock level - re-order quantity (HL)

Calculate buffer stock

300

(Defected output / total tested output) x 100 (HL)

Calculate the defect rate

400

Total fixed costs / total output

Calculate average fixed costs

500

Total contribution / operating profit (HL)

Calculate operating leverage 

Definitions

100

Costs that can be directly associated with the output or sale or a good or service (also known as cost of sales)

What are direct costs?

200

Customers who have received trade credit. Listed as a current asset in the statement of financial position (Balance Sheet).

What are debtors?

300

Suppliers who have sold goods to the business on trade credit. Listed as a current liability in the statement of financial position (Balance Sheet).

What are creditors?

400

The total value of the owner's investment into the business. Calculated as Share capital + accumulated retained profits. 

What is equity (share capital)?

500

The difference between the selling price and the unit cost. Usually expressed as a percentage figure, such as 50% above the cost per unit. For example, if a toy costs $10 per unit to make and the firm wanted to earn a 80% profit, then the selling price would be $18 ($10 × 1.8 = $18). 

What is the profit margin (mark-up)?