ACCA Complete Formulae Sheet f2

ACCOUNTING FOR COSTS VC/unit = (TCH – TCL – STEPPED COST)/(TUH – TUL) Pie Chart Degree = (cost/TC)*360 TC of Holding = Avg. Inventory * Holding cost/unit TC of Ordering = No. of orders * cost/order Reorder level = Max. Usage * Max. Lead time Max. Level = Reorder level + Reorder qty-(Min., Usage*Min. Lead time) Min. Level = Reorder level – (Avg. Usage * Avg. Lead time) Idle time ratio = (Idle Hrs/Total Hrs) * 100% Labour Turnover Rate = (Replacements/Avg. No. of Employees)*100% OAR = Budgeted overheads/Budgeted hours (UNDER)/OVER ABSORPTION = (Actual hours * Std. OAR/unit) – Actual Overheads MARGINAL COSTING SP – VC = Contribution – FC = Profit Marginal costing profit +/(-)

Increase/(decrease) in inventory level * STD. OAR/unit Absorption Costing Profit

Process Costing Cost/unit = (Material cost + Conversion Cost – Scrap of Normal loss)/Expected output Equivalent units of O/P WIP: FIFO- % to complete; WAC – 100% O/P+Input-C/S = Total Output Units started and completed this period = INPUT – C/S Physical distribution = (X’s units/ Total units)*Common costs Sales value basis = (X’s Sales value @ Split off/ Total Sales Value @ Split off)*Common Costs

Alternative Costing Methods Cost/cost driver = COST POOL$/No. of Cost drivers TARGET COST = Estimated SP – Expected Profit BUDGETING Additive Model, S =Y –S , Total to 0 Multiplicative model, S = Y/T , total to 4 Layspeyre P.I. = (∑PnQ0)/(∑P0Q0) * 100 Layspeyre Q.I. = (∑P0Qn)/(∑P0Q0) * 100 Paasche P.I. = (∑PnQn)/(∑P0Qn) * 100 Paasche Q.I. = (∑PnQn)/(∑PnQ0) * 100 Fishers index = √ (Layspeyre * Paasche) PRODUCTION BUDGET = SALES – C/S FG – O/P FG MAT. USAGE BUDGET = PRODUCTION UNITS * STD. USAGE /UNIT MAT. PURCHASE BUDGET = MAT. USAGE+ C/S MATERIALS – O/P MATERIALS LABOUR BUDGET = PRODUCTION * STD HRS* STD. RATE VALUE ADDED = Sales – Cost of Bought in material and services Pay back period = Year before recovery +[(unrecovered cost/ cashflow during next year)*12] S = P(1+r)n P = S/(1+r)n Effective annual Interest rate: (1+R) = (1+r)n Perpetuity = 1/r IRR = A+[a/(a-b)*(B-A)]*100%

VARIANCE ANALYSIS MAT. PRICE = AQSP-AQAP MAT. USAGE = SQSP – AQSP LAB. RATE = AHSR – AHAR LAB. EFFICIENCY = SHSR – AAH SR IDLE TIME = IDLE HRS * SR VOH EXPENDITURE = AAHSR – AAHAR VOH EFFICIENCY = SHSR – AAHSR FOH TOTAL VARIANCE = ABSORBED OH – ACTUAL OH FOH EXPENDITURE = BUDGETED OH – ACTUAL OH FOH VOLUME = BUDGETED OH – (ACTUAL PRODUCTION * STD.OAR/UNIT) FOH EFFICIENCY = [(ACTUAL PN*STD HRS) – ACTUAL HRS]*STD OAR/HR FOH CAPACITY = (BUDGETED HRS – ACTUAL HOURS)*STD OAR/HR SALES PRICE = AQAP-AQSP SALES VOLUME = (AQ-BQ)* STD. PROFIT OR STD. CONTRIBUTION STD PROFIT FROM ACTUAL SALES = BUDGETED PROFIT – SALES VOLUME VARIANCE STD COST OF ACTUAL SALES = BUDGETED PROFIT – SALES VARIANCES

PERFORMANCE MEASUREMENT ROCE = PBIT/CAPITAL EMPLOYED *100% ROI = PROFIT/INVESTMENT *100% RETURN ON SALES OR PROFIT MARGIN = PROFIT/SALES REVENUE * 100% ASSET TURNOVER = SALES REVENUE/CAPITAL EMPLOYED COST TO SALES RATIO = COST/SALES REVENUE CURRENT RATIO = CA/CL

QUICK RATIO = CA – INVENTORY/CL RECIEVABLE DAYS = AVG. RECEIVABLES/CREDIT SALES *365 INVENTORY DAYS = AVG INVENTORY/COST OF SALES *365 PAYBALE DAYS = AVG. PAYABLES/CREDIT PURCHASES * 365 WORKING CAPITAL CYCLE = INVENTORY DAYS + RECIEVABLE DAYS – PAYABLE DAYS GEARING RATIO = DEBT/(DEBT+EQUITY) OPERATING GEARING = OPERATING PROFIT/CONTRIBUTION INTERSET COVER = PBIT/INTEREST EPS = PAT AND PREFERENCE DIVIDEND/NO OF ORDINARY SHARES PE RATIO = PRICE PER SHARE/EPS DIVIDEND COVER = EPS/DIVIDEND PER SHARE CAPACITY RATIO = ACTUAL HRS/BUDGETED HRS* 100% ACTIVITY RATIO = STD HRS/BUDGETED HRS *100% EFFICIENCY RATIO = STD. HRS/ACTUAL HRS *100%