1.

Contribution Per Unit = S – V

2. PV Ratio = C/S
3. Breakeven Point I in Units = F/C
4. Breakeven Point on Sales = F/C x S
5. Number of Units to earn a point before tax = F + Target profit/C
6. Number of Unit to earn a profit after tax = F + TP/(I + t)/C
7. The margin of Safety (MOS) = Budgeted Sales – Breakeven Sales
8. Number of Units to earn 10% profit on sales = Sales units = FC + VC + Profit
9. Material Cost Variance = (SC – AC)
10. Material Price Variance = (SP – AP) AQ
11. Material Usage Variance = (SQ – AQ) SP
12. Material Mix Variance = (SM – AM) SP
13. Material Yield Variance = (SY – AY) SP
14. Labour Rate Variance = (SR – AR) AT
15. Labour Idle Time Variance = (Actual Idle Time x Standard rate)
16. Labour efficiency variance = (ST – AT) SR
17. Overhead cost Variance = (SR x Output Achieved) – AC
18. Fixed Overhead Cost Variance = (SR x Q) – AC
19. Fixed Overhead Capacity Variance = (BH – AH ) SR
20. Fixed Overhead Efficiency Variance = (SH – AH) SR
21. Variable Overhead cost Variance (SR x Q) – AC
22. Variable Overhead Expenditure Variance (SR – Actual hours worked) – AC

Contribution margin: Sales xxx

Less variance cost xxx

Contribution margin xxx

Contribution margin percentage

= contribution/ Sales x 100%

IMPORTANCE OF CORPORATE PLANING

1. Planning serve as a way by which an organization expresses the desire to determine its
own future.
2. The increased sophistication of products and production processes made decision making
difficult for top executives. Hence planning will assist in solving the problem.
3. Planning aids the efficient use of organizational resources. All Organizations, Whether
large or small, have united resources.
4. Planning assist in creating competitive advantages, planning helps business get a realistic
view of their current strengths and weaknesses relative to major competitors.
RELATIONSHIP BETWEEN PLANNING AND CONTROL
 Without the basis of planning, controlling activities becomes baseless and without
control, planning becomes meaningless activities. Planning and control reinforce each
other. Relation between planning and control are:
1. Planning proceeds controlling and control succeeds planning
2. Planning and control are inseparable functions of management
3. Activities are put on rails by planning and they are kept at right place through control
4. The process of planning and control works on system approach

Similarities between management accounting and cost accounting in practice, there is

no hard dividing line. Generally, Management accounting is wider in scope and uses
more advanced techniques. However, the fundamental requirement for management
account is the existence of a sound costing system to provides basic data.
Management accounting and cost accounting are mainly concerned with the provision
of information for internal planning control and decision making purposes.

CHARACTERISTIC OF A GOOD MANAGEMENT ACCOUNTING INFORMATION

I. Timeliness: up-to-date information is of more use to management then outdated news.

The information should be supplied timeously for the purpose for which it is required
II. Relevance: Relevance is regarded as one of the two major Characteristics the
information supplied should be that which will satisfy the needs of the management
(Users)
III. Reliable: reliable is regarded as one of the other main attribute of management
accounting information. This information should be accurate and produced in
accordance with professional requirements or managerial guidelines
IV. Understandable: Information is not much use to a user if it is presented in such a
manner that no one can understand it. Information is only relevant to the extent that
they are interpreted and understand