COGS = beginning inventory + purchases – ending inventory

Predetermined overhead rate = estimated annual costs / expected annual operating activity.

Activity based overhead rate = estimated overhead per activity / expected use of cost drivers
per activity

Variable cost per unit = change in total costs / high minus low activity level

Unit contribution margin = unit selling price – unit variable costs

Contribution margin ratio = unit contribution margin / unit selling price ( het antwoord is een
percentage)

Break even point:

Mathematical equation
Net income(=$0) = required sales – variable costs – fixed costs
Example: 500q-300q-200000=$0  q=1000
Break even sales dollar = 1000x500

Contribution margin technique

Break even points in units = fixed costs / unit contribution margin
Break even point in dollars = fixed costs / contribution margin ratio

Target net income

Mathematical equation
Target net income = required sales – variable costs – fixed costs

Contribution margin technique

Required sales in units = (fixed costs + target net income) / unit contribution margin
Required sales in dollars = (fixed costs + target net income) / contribution margin ratio

Margin of safety  tells us how far sales could fall before a company begins operating at
loss
Margin of safety in dollars = actual (expected) sales - break even sales
Margin of safety ratio = margin of safety in dollars / actual (expected) sales

Weighted average unit contribution margin

Weigthed average unit contribution margin = (unit contribution margin product 1 x sales mix
percentage product 1) + = (unit contribution margin product 2 x sales mix percentage
product 2) (antwoord is in dollars)

Break even points in units = fixed costs / Weighted average unit contribution margin

Weighted average contribution margin ratio = (contribution margin ratio product 1 x sales
mix percentage unit 1) + (contribution margin ratio product 2 x sales mix percentage unit 1)

Break even point in dollars = fixed costs / weighted average contribution margin ratio
Target costing:

Target cost = market price – desired profit

Cost plus pricing:

Markup (profit) = selling price – cost

Target selling price = cost + markup

Markup (desired ROI per unit) = (desired ROI percentage x amount invested) / units
produced

Selling price per unit = variable cost per unit + fixed cost = total cost + Markup (desired ROI
per unit)

Markup percentage = markup (desired ROI per unit) / total unit cost

Target selling price per unit = total unit cost + (total cost x markup percentage)

Variable cost pricing: