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Flashcards in Formula Deck (41)
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1

Contribution per unit

Selling price (per unit) - variable cost (per unit)

2

Cost per unit

Total cost / Number of units

3

High low method

what does it give you?

(Highest cost – lowest cost) / (Highest output – lowest output)

=Variable cost per unit

4

Break even – units

Total fixed costs/contribution per unit

5

Breakeven – sales revenue

Total fixed costs/contribution per unit X selling price

6

Margin of safety percentage

[current output – breakeven output/current output] X 100

7

Target profit – units

(Total fixed cost + target profit) / Contribution per unit

8

Contribution to sales ratio

Contribution £ /selling price £

9

Cost per unit of expected output

(Input cost – scrap value of normal cost) / expected output

10

Economic order quantity

Square root of (2 x annual demand x order cost) / Annual inventory holding cost for one unit

11

% difference

Difference / gross or retail x 100

12

Sustainability is

Is ability to last

Meeting the needs of the present without compromising the needs of the future

The three elements of sustainable development are plant profit and people

13

PLCA- which side is purchases on

Right side

14

SLCA which side is sales on

The left side

15

VAT CA which side is the purchases and sales on?

Opposites to PLCA and SLCA

Purchases on left
Sales on right

16

Structure of SOFP

NON C ASSETS

CURRENT ASSETS

CURRENT LIABILITIES

(Current assets-current liabilities) = NET CURRENT ASSETS

NON C LIABILITIES

(Non current assets - NET current assets - non current liabilities) = NET ASSETS

17

If you discover that the client has been money laundering who do you report it to

The National crime agency

18

Mark up profit is calculated as a % of _____

Mark up profit is calculated as a percentage of the cost

19

Margin profit is calculated as a % of ___________

Margin profit is calculated as a percentage of selling price

20

Margin what is treated as 100%

Selling price

21

Mark-up - what is treated as 100%

Cost

22

Structure of SOPL

Sales rev

Op inv
+Purchases
-Clos inv
= cost of goods sold

(Sales rev-COS) =Gross profit


Add any income

Less any expenses
Total expenses

= Profit/Loss for year

23

Ownership:

Sole trader
Partnership
Limited liability partnership
Limited company
Charity

Sole trader- sole trader owns
Partnership- partners own
Limited liability partnership - members own (separate legal entity)
Limited company - owned by shareholders (separate legal entity)
Charity - owned by trustee

24

Management:

Sole trader
Partnership
Limited liability partnership
Limited company
Charity

Sole trader - manages
Partnership - all partners can manage
Limited liability partnership - all members can manage
Limited company - run by directors on behalf of shareholders
Charity - trustee

25

Responsibility for debts:

Sole trader
Partnership
Limited liability partnership
Limited company
Charity

Sole trader - fully liable
Partnership - fully liable
Limited liability partnership - loose up to investment
Limited company - loose up to investment
Charity - for an unincorporated charity trustees are liable

26

Taxation of profits:

Sole trader
Partnership
Limited liability partnership
Limited company
Charity

Sole trader - income tax on profits by owner
Partnership - each partner liable for income tax on their share
Limited liability partnership - each member liable for income tax on their share
Limited company - cooperation tax on profits
Charity - exempt on tax if income is used for charity

27

Ownership terminology:

Sole trader
Partnership
Limited liability partnership
Limited company
Charity

Sole trader - Capital
Partnership - Capital
Limited liability partnership - Capital
Limited company - Equity
Charity - Net assets form funds

28

Distributions terminology:

Sole trader
Partnership
Limited liability partnership
Limited company
Charity

Sole trader - drawings
Partnership - drawings
Limited liability partnership - drawings
Limited company - dividends
Charity - distributions

29

Accounting regulations:

Sole trader
Partnership
Limited liability partnership
Limited company
Charity

Sole trader:
No regulations
financial statements a private
Partnership:
Partnership act 1890
Partnership agreement
Financial statements are Private
Limited liability partnership :
Limited liability partnership act 2000
Limited liability partnership agreement
Financial statements visible on companies house
Limited company :
Companies act 2006
Financial reporting standards
Financial statements are on companies house
Charity :
Charities act 2011
Charity regulations
Financial statements are available to the public via charity commissions

30

Definition of material mistake

When information contained in financial statements is untrue