Closing stock = Opening stock + Production – Demand
Variable Costs, Break-even Points and Margin of Safety VC = Labour + materials + component/assemblies + maintenance + consumables
Total cost = fixed cost + variable cost
Total cost = Fixed cost + number of units made x cost per unit
Income (Sales Revenue) = number of units sold x price charged per unit
Profit = Income – Total costs = Sales Revenue – Fixed Costs – Variable Costs
Total Contribution = Sales Revenue – Total Variable costs
Contribution per unit = Selling price of a unit – variable costs of a unit
Contribution per unit = Total Contribution Number of units sold
Number of units to be sold to break-even: B/E = Total fixed cost Contribution per unit
Sales value at break-even point: B/E = Total Fixed Cost x Sales value Total contribution
As a percentage at B/E point = Sales value at break-even point x 100 Total Sales value
Margin of Safety = Actual Sales - Breakeven Sales
Margin of Safety = Budgeted Sales - Breakeven Sales
Margin of Safety = Budgeted Sales – Breakeven Sales x 100% Budgeted Sales
Gross profit margin (%) = Profit (PBIT) x 100 Sales
Critical Path Analysis Total Float: TF = (LF-ES) – D
LF = the latest finish time
ES = Earliest start time
EF = Earliest finish time
D = Duration of the activity.
EF = ES + D (Forward Pass through the network)
LS = LF – D (Backward Pass through the network)
Crashing a Project Crash Cost per day = Crash Cost – Normal Cost Normal Time – Crash Time
PERT Formula Expected Time, te = a + 4m + b 6
The variance (sigma squared) of activity duration is: 2 = {(b-a)/6}2