MARGINAL COSTING FORMULAS

1		Marginal Costing Equation	Sales - VC = FC + Profit
2		Contribution	Sales - VC
			Profit + FC
3		Profit Volume Ratio (In Marginal Costing, Profit = Contribution) (Profit = EBIT)	Contribution / Sales
			Change in Profit / Change in Sales
			Change in Contribution / Change in Sales
			100% - VC Ratio (PV % + VC % = 100% of  Sales)
4		Break Even Point	Total Revenue  = Total Cost
		Break Even Point(In Rupees)	FC / PV Ratio
		Break Even Point(In Rupees)	Break Even Point * Selling Price
		Break Even Point(Quantity)	FC / Contribution p.u
		Note:	At BEP, Total Contribution = Total Fixed Cost
5		Margin Of Safety	Total Sales - Break even Sales
		Margin Of Safety(In Rupees)	Profit / PV Ratio
		Margin Of Safety(Quantity)	Profit / Contribution p.u
6		Indifference Point / Cost Break Even Point	Total Sales = Total Profits
		(In Rupees)	Difference in FC / Difference in VCR
		(In Rupees)	Difference in FC / Difference in PVR
		(In Quantity)	Difference in FC / Difference in VC p.u
		(In Quantity)	Difference in FC / Difference in Contribution p.u
7		Shut Down Point
		(In Rupees)	Avoidable FC / PV Ratio
		(In Quantity)	Avoidable FC / Contribution p.u
8		Avoidable FC	Total FC - Min Unavoidable FC
OTHERS
1		Contribution	Profit + FC
2		Sales(In Rupees)	Contribution / PV Ratio
3		Profit	Contribution - FC
4		Contribution	Sales * PVR
5		Finding the Selling Price	Total VC / VCR
6		Finding the Profit	MOS * PVR
		Note:	Always MOS + PVR = 100%
Notes:
1	VC p.u Remains Same (it Changes if units increased or decreased but not Sale Price)
2	FC p.u. Varies but remains fixed in total(FC are the Period Cost hence charged off to P & L A/c in Marginal Costing)
3	Point of Indifference
	a)Below the POI : Choose the product having lesser FC
	b)Above the POI : Choose the product having Higher FC
4	BEP% + MOS% = 100% of Sales FC = Fixed Cost; VC = Variable Cost; PV Ratio = Profit Volume Ratio