MATH FOR BUSINESS ASSIGNMENTS

Chapter 5:

Symbols: CM = unit contribution margin, CR = contribution rate,

n = number of pieces of data, which in this chapter is the level of output.

NI = net income, S = unit selling price of the product; TFC = total fixed cost; TR = total revenue,

Formula:

Unit Variable Cost: VC = TVC /𝑛 (Section 5.1)

Net Income Using a Total Revenue and Cost Approach: NI = n(S) − (TFC + n(VC)) (Section 5.1)

Unit Contribution Margin: CM = S – VC (Section 5.1)

Net Income Using Total Contribution Margin Approach: NI = n(CM) – TFC (Section 5.1)

Contribution Rate if Unit Information Is Known: CR = (CM/S) × 100 (Section 5.1)

Contribution Rate if Aggregate Information Is Known: CR = ((TR−TVC)/ TR) × 100 (Section 5.1)

Unit Break-Even: n = TFC/CM (Section 5.2)

Dollar Break-Even: TR = TFC/CR (Section 5.2)

Chapter: 6

Single Discount: N = L × (1 - d) (Section 6.1)

Discount Amount: D$ = L × d (Section 6.1)

Discount Amount: D$ = L – N (Section 6.1)

Multiple Discounts: N = L × (1 − d1) × (1 − d2) × ... × (1 − dn) (Section 6.1)

Single Equivalent Discount: dequiv=1−(1 − d1) × (1 − d2) × ... × (1 − dn) (Section 6.1)

Markup Formulas

The Selling Price of a Product: S = C + E + P (Section 6.2)

Markup Amount: M$ = E + P (Section 6.2)

The Selling Price of a Product Using the Markup Amount: S = C + M$ (Section 6.2)

Markup on Cost Percentage: MoC% = M$/C × 100 (Section 6.2)

Markup on Selling Price Percentage: MoS% = M$/S × 100 (Section 6.2)

Markdown Formulas

The Sale Price of a Product: Sonsale = S × (1 − d) (Section 6.3)

Markdown Amount: D$ = S × d (Section 6.3)

Markdown Amount: D$ = S – Sonsale (Section 6.3)

Markdown Percentage: d = D$/S × 100 (Section 6.3)