MARGINAL COSTING

1. Sales or selling price or market price or value of turnover or invoice

price or inflation price or loaded price

= total cost + profit

= variable cost + fixed cost + profit
= contribution / p/v ratio
= contribution + variable cost
= marginal cost / marginal cost ratio

2. profit or net margin or net income

= sales - total cost
= sales – (variable cost +fixed cost)
= contribution - fixed cost
= margin of safety X p/v ratio

3. loss

= total cost - sales

= fixed cost – contribution

4. contribution or gross margin or marginal contribution

= sales – variable cost

= fixed cost + profit
= sales X p/v ratio
= fixed cost – loss
= fixed cost / break-even units

5. fixed cost or rigid cost or constant cost

= total cost – variable cost

= contribution – profit
= sales – (variable cost + profit)
= contribution – loss

6. variable cost or marginal cost or differential cost

= total cost – fixed cost

= sales – contribution
= sales – ( fixed cost + profit)
 = direct material + direct labour + direct expenses + variable
overhead

7. Break – even point i.,e BEP ( in units) or ( in output)

= total fixed cost/ contribution per unit

= break -even sales in rupees / selling price per unit

8. Break – even point i.,e BEP (sales in rupees)

= total fixed cost / contribution per unit X selling price per unit
= total fixed cost / total contribution X total sales
= total fixed cost / p/v ratio
= total fixed cost / 1- (variable cost / sales)
= break even point (units) X selling price per unit

9. p/v ratio

= contribution /sales X 100

= change in profit / change in sales X 100
= change in contribution / change in sales X 100

10.margin of safety

= actual sales – break even sales

= profit/ p/v ratio
= profit x selling price per unit/ selling price per unit – variable
cost per unit
= profit/ p/v ratio X 100
= margin of safety /actual sales X 100

11.sales volume to earn required profit (in units) or sales for desired
profit (in units)

= total fixed cost + required profit/ contribution per unit

12.sales volume to earn required profit (in value) or sales for desired
profit (in rupees)

= (total fixed cost + required profit ) X sales / total contribution

= total fixed cost + required profit / p/v ratio