BSc Management Accounting, Year 1, Calculations

Contribution Margin Ratio
Contribution / Sales revenue x 100
Margin of Safety
(Planned Sales – Sales to break even) / planned revenue
Revenue – variable costs
Sales Volume Variance
Flexed Contribution – Actual Contribution
Sales Price Variance
Actual Sales revenue – Sales revenue in flexed budget
Materials Usage Variance
flexed Quantity (what should we have used?) – Actual Quantity (what we actually used) x standard price
Materials Price Variance
[Actual quantity x standard cost] – total actual cost
Labour Efficiency Variance
Flexed hours (how many hours should have been necessary to produce x units) – actual hours (how many hours were necessary) x standard wage rate
Labour Rate Variance
[Actual Hours x standard cost] – total actual cost
Fixed Cost Variance
Flexed Budget fixed costs – Actual fixed costs
Accounting Rate of Return
Average annual operating profit / average investment to earn that profit (net assets (cost + disposal value)) x 100
Average Annual Operating Profit
Total operating profit after depreciation / number of years

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