@cpa8488 My exam is supposed to be today but I rescheduled it on Saturday. Thanks anyway.
To all who are struggling on formulas here are my basic foundations:
Turnover means you will use Sales/COS/Purchases as numerator. Well if you don't know what is your denominator, think of it, if you book Sales the other side is AR, if you book COS the other side is inventory and if you book Purchases the other side is AP. All other turnovers (Assets, fixed assets, equity) used Net sales as numerator.
Days sales in AR/Inventory/AP – Now you know how to calculate Turnover, you just have to divide that from the given number of days in a year. The tricky part here if the number of days is not given then you have to try either 360 (most likely) or 365.
Returns – Most likely you will use Net income.
Ratios – it depends on the name, ie, debt to equity then you will divide debt by the equity. If asset ratio, normally the denominator is current liabilty (ie. current, quick, cash, etc).
Variance – There are 2 variances. Volume (volume/quantity/efficiency) and Price (Rate/Price/Efficiency). In calculative volume ALWAYS use SP, that means (AQ-SQ) x SP. For Price variance, ALWAYS used AQ, so (SP-QP) x AQ. Apply this 2 basic formulas in materials, labor and OH variances and you should be good. Now whether favorable or unfavorable is common sense. Of course if you use more than what you budgeted, that's not good. If your actual price is more than what was budgeted, that's not good, and vice versa.
I hope it makes sense!
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