Accounting Formulas

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1. CS Ratio (Target Profit)

  • Difference in Cost/Difference in Units=VCPU
  • Contribution / Sales (revenue)
  • Work out CPU and Contribution per Limited Resource and rank
  • (Square Root) 2 X Cost of placing each order X Annual Demmand / Holding cost for 1 Unit
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2. Economic Order Quantity

  • Difference in Cost/Difference in Units=VCPU
  • (Square Root) 2 X Cost of placing each order X Annual Demmand / Holding cost for 1 Unit
  • Work out CPU and Contribution per Limited Resource and rank
  • Selling Price - Varible Cost

3. Limiting Factors

  • Fixed Cost/Contribution per Unit
  • Work out CPU and Contribution per Limited Resource and rank
  • Difference in Cost/Difference in Units=VCPU
  • Work out CPU and Contribution per Limited Resource and rank

4. Breakeven Point Units

  • Fixed Cost/Contribution per Unit
  • Budgeted Sales Units - Breakeven Sales Units / Sales X 100
  • BEP Units X Selling Price
  • Budgeted Sales Units - Breakeven Sales Units

5. High Low Ration

  • BEP Units X Selling Price
  • Selling Price-Variable Cost
  • Difference in Cost/Difference in Units=VCPU
  • Fixed Cost/Contribution per Unit

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