Summary: Basics of financial management (business economics 2)

Summary business economics 2
© Nathalie Wittendorp




All formulas BE 2
Total costs = fixed costs + variable costs

Break even = F / P – V

Contribution margin = P – V

Safety margin = Actual output – breakeven / Actual output

Full unit costs = Fixed costs / Normal output – Variable costs / Actual output

Output level variance = (A – N) × F / N
Volume variance = (A – N) × F / N

Capacity utilization rate = A / available capacity × 100

Budgeted profit = transaction result – output level variance

Sales revenue = selling price × actual output

Mark-up rate method = indirect / direct costs

Budget variance = (Standard quantity × Standard product) – (Actual quantity × Actual product)

Efficiency volume variance = (Sq – Aq) × Sp

Price variance = (Sp – Ap) × Aq

Applied fixed costs = F / normal output level
fixed costs per product = F / normal output level

Profit = ( F + wanted profit ) / p – v