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  • Costing Formulaes

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    Devan Kumaran
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    The document outlines six costing formulas used in business: 1) the marginal cost equation, 2) contribution, 3) profit-volume ratio, 4) break even point, 5) margin of safety, and 6) required sales for a given profit. It provides the equations for calculating each, such as contribution equals sales minus variable costs, break even point in units equals fixed costs divided by contribution per unit, and required sales equals required profit plus fixed costs divided by the profit-volume ratio. The document was compiled by Madaiyan Kumaran.

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    The document outlines six costing formulas used in business: 1) the marginal cost equation, 2) contribution, 3) profit-volume ratio, 4) break even point, 5) margin of safety, and 6) required sales for a given profit. It provides the equations for calculating each, such as contribution equals sales minus variable costs, break even point in units equals fixed costs divided by contribution per unit, and required sales equals required profit plus fixed costs divided by the profit-volume ratio. The document was compiled by Madaiyan Kumaran.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    13 views1 page

    Costing Formulaes

    Uploaded by

    Devan Kumaran
    The document outlines six costing formulas used in business: 1) the marginal cost equation, 2) contribution, 3) profit-volume ratio, 4) break even point, 5) margin of safety, and 6) required sales for a given profit. It provides the equations for calculating each, such as contribution equals sales minus variable costs, break even point in units equals fixed costs divided by contribution per unit, and required sales equals required profit plus fixed costs divided by the profit-volume ratio. The document was compiled by Madaiyan Kumaran.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
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    MNM COACHING CENTRE - DHARMAPURI

    COSTING FORMULAES
    1. MARGINAL COST EQUATION SALES-VARIABLE COST = FIXED COST + PROFIT 2.CONTRIBUTION CONTRIBUTION = SALES - VARIABLE COST CONTRIBUTION = FIXED COST+ PROFIT CONTRIBUTION = PV RATIO X SALES 3.PROFIT-VOLUME RATIO PV RATIO = (CONTRIBUTION/SALES) X 100 PV RATIO = {(SALES - VARIABLE COST)/SALES} X 100 WHEN PROFITS OF TWO PERIODS IS GIVEN PV RATIO = (CHANGE IN PROFITS/CHANGE IN SALES) X 100 4. BREAK EVEN POINT BEP IN VOLUME (UNITS) = FIXED COST/ CONTRIBUTION PER UNIT BEP IN VOLUME (UNITS) = BREAK EVEN SALES/ SELLING PRICE PER UNIT BEP IN RUPEES OR BREAK EVEN SALES = FIXED COST / PV RATIO BEP IN RUPEES OR BREAK EVEN SALES = BREAK EVEN VOLUME(UNITS) X SELLING PRICE PER UNIT 5.MARGIN OF SAFETY (MOS) MOS IN RUPEES = PROFIT / PVRATIO MOS IN UNITS = PROFIT / CONTRIBUTION PER UNIT 6. REQUIRED SALES FOR GIVEN PROFIT REQUIRED SALES IN RUPEES = (REQUIRED PROFIT + FIXED COST) / PV RATIO REQUIRED SALES IN RUPEES = (REQUIRED PROFIT + FIXED COST) / CONTRIBUTION PER UNIT

    COMPILED BY MADAIYAN KUMARAN .D MADHU

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