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It includes throughput accounting metrics, CVP analysis break-even and margin of safety measures, limiting factor tools such as shadow price and slack, pricing decision relationships including cost-plus, ROI pricing, and demand elasticity with optimal pricing and marginal revenue, plus expected value and perfect information for risk and uncertainty. It also provides quantitative statistics formulas (correlation, determination, regression, learning curve) and financial ratios for capital employed, profitability, and liquidity.","| Sl. No. | Classification | Ratio | Formula |\n| --- | --- | --- | --- |\n| 1 | Throughput\u003Cbr>Accounting | Throughput | Sales-Material Cost |\n| 2 | Throughput\u003Cbr>Accounting | Conversion Cost | Production Cost excl Material Cost |\n| 3 | Throughput\u003Cbr>Accounting | Throughput Accounting Ratio (TPAR) | Return per factory hour / Cost per factory hour |\n|  |  | Return per factory hour | Throughput / Factory Hours |\n|  |  | Cost per factory hour | Conversion Cost / Factory Hours |\n|  |  | Factory hours | Hours on bottleneck resource |\n| 4 | CVP Analysis | Break-even point (units) | Fixed Cost / Contribution pu\u003Cbr>Contribution = Sales-Variable Cost |\n| 5 | CVP Analysis | Contribution to Sales Ratio (CS Ratio) or Profit Volume Ratio (PV Ratio) | Contribution pu / SP pu |\n| 6 | CVP Analysis | Break-even revenue ($) | Break-even point (units) x SP pu |\n|  |  |  | Fixed Cost / CS Ratio |\n| 7 | CVP Analysis | Margin of Safety sales (units & $)(MOS) | Budgeted Sales (units) -Break-even point (units) |\n|  |  |  | Budgeted Sales ($) -Break-even sales ($) |\n| 8 | CVP Analysis | Margin of Safety % | MOS / Budgeted Sales |\n| 9 | CVP Analysis | Desired Units to make a target profit | (Fixed Cost + Target Profit) / Contribution pu |\n| 10 | CVP Analysis | Desired Revenue to make a target pro | fi(Fixed Cost + Target Profit) / CS Ratio |\n| 11 | Limiting Factor Analysis | Shadow Price | There are 3 ways of interpreting shadow price:\u003Cbr>i. Addl contribution from 1 addl. limiting factor\u003Cbr>ii. Max extra amount (over & above the normal price) that should be paid for 1 addl. limiting factor |\n| 12 | Limiting Factor Analysis | Slack | Resource available-Resource consumed at optimal point |\n| 13 | Pricing Decision | Full Cost plus Pricing | Sales = Budgeted Production Cost + Budgeted Non-production Cost + Mark-up |\n| 14 | Pricing Decision | Marginal Cost plus Pricing | Sales = Budgeted Variable Production Cost + Budgeted Variable Non-production Cost + Mark-up |\n| 15 | Pricing Decision | ROI Pricing | Sales = Budgeted Production Cost + Budgeted\u003Cbr>Non-production Cost + (ROI % x Capital Employed) |\n| 16 | Pricing Decision | Price Elasticity of Demand | % change in demand / % change in price |\n| 17 | Pricing Decision | Demand Equation for Optimal Pricing | P = a-bQ\u003Cbr>P = selling price\u003Cbr>Q = quantity demanded at that price\u003Cbr>a = theoretical maximum price i.e. price at which demand =0 b = change in price / change in demand\u003Cbr>Demand equation shows the relationship between price charged fora product and the subsequent demand for that product |\n| 18 | Pricing Decision | Demand Equation for Marginal Revenue | MR = a-2bQ\u003Cbr>MR = marginal revenue i.e. revenue by selling 1 addl. unit Q = quantity demanded at that price\u003Cbr>a = theoretical maximum price i.e. price at which demand =0 b = change in price / change in demand\u003Cbr>Demand equation shows the relationship between marginal revenue for a product and the subsequent demand for that product |\n| 19 | Pricing Decision | Profit Maximisation Output | Level of Output where MR = MC. |\n\n\n| 20 | Pricing Decision | Profit Maximising Selling Price | Step 1: Determine the demand equation\u003Cbr>Step 2: Make the MR equation given to value of MC Step 3: Substitute the values of a & b in Step 1 into the Step 2 MR formula, and solve to find Q.\u003Cbr>Step 4: Take the Q in Step 3 & put in the demand function to ascertain the price. |\n| --- | --- | --- | --- |\n| 21 | Risk &\u003Cbr>Uncertainty | Expected Value | Weighted Avg of px\u003Cbr>p = probability of the outcome\u003Cbr>x = value of the outcome |\n| 22 | Risk &\u003Cbr>Uncertainty | Value of Perfect Information | EV (with perfect info) -EV (without perfect info) Perfect info is the info which predicts a particular outcome with 100% accuracy. |\n| 23 | Risk &\u003Cbr>Uncertainty | Sensitivity Analysis | Assume the variable for which sensitivity is to be calculated as \"x\" .\u003Cbr>Then, solve using \"x\", the equation of Break-even Point i.e Contribution = Fixed Cost\u003Cbr>Sensitivity helps to calculate the percentage change in ","cbCaieTz0XJP6JRk","https://ap.wps.com/l/cbCaieTz0XJP6JRk","pdf",121745,2,1,3,"English","en",105,"# Throughput Accounting\n## CVP Analysis\n## Limiting Factor Analysis\n# Pricing Decision\n## Risk & Uncertainty\n# Quantitative Techniques\n## Profitability\n## Liquidity","[{\"question\":\"What formula defines throughput accounting’s throughput ratio (TPAR)?\",\"answer\":\"TPAR is calculated as return per factory hour divided by cost per factory hour.\"},{\"question\":\"How is the break-even point in units computed in CVP analysis?\",\"answer\":\"Break-even units equal Fixed Cost divided by Contribution per unit, where Contribution = Sales − Variable Cost.\"},{\"question\":\"What is the difference between shadow price and slack in limiting factor analysis?\",\"answer\":\"Shadow price is interpreted as the additional contribution from one additional limiting factor (or the max extra amount over the normal price). Slack equals Resource available minus Resource consumed at the optimal point.\"}]",1784151616,8,{"code":4,"msg":31,"data":32},"ok",{"site_id":25,"language":24,"slug":33,"title":13,"keywords":34,"description":14,"schema_data":35,"social_meta":84,"head_meta":86,"extra_data":88,"updated_unix":28},"pm-formula-sheet","",{"@graph":36,"@context":83},[37,51,66],{"@type":38,"itemListElement":39},"BreadcrumbList",[40,44,47,49],{"item":41,"name":42,"@type":43,"position":21},"https://docshare.wps.com","Home","ListItem",{"item":45,"name":46,"@type":43,"position":20},"https://docshare.wps.com/document/","Document",{"item":48,"name":12,"@type":43,"position":22},"https://docshare.wps.com/document/exam/",{"item":50,"name":13,"@type":43,"position":11},"https://docshare.wps.com/document/pm-formula-sheet/81197/",{"url":50,"name":13,"@type":52,"author":53,"headline":13,"publisher":55,"fileFormat":58,"inLanguage":24,"description":14,"dateModified":59,"datePublished":60,"encodingFormat":58,"isAccessibleForFree":61,"interactionStatistic":62},"DigitalDocument",{"name":9,"@type":54},"Person",{"url":41,"name":56,"@type":57},"DocShare","Organization","application/pdf","2026-07-23","2026-07-15",true,{"@type":63,"interactionType":64,"userInteractionCount":20},"InteractionCounter",{"@type":65},"ViewAction",{"@type":67,"mainEntity":68},"FAQPage",[69,75,79],{"name":70,"@type":71,"acceptedAnswer":72},"What formula defines throughput accounting’s throughput ratio (TPAR)?","Question",{"text":73,"@type":74},"TPAR is calculated as return per factory hour divided by cost per factory hour.","Answer",{"name":76,"@type":71,"acceptedAnswer":77},"How is the break-even point in units computed in CVP analysis?",{"text":78,"@type":74},"Break-even units equal Fixed Cost divided by Contribution per unit, where Contribution = Sales − Variable Cost.",{"name":80,"@type":71,"acceptedAnswer":81},"What is the difference between shadow price and slack in limiting factor analysis?",{"text":82,"@type":74},"Shadow price is interpreted as the additional contribution from one additional limiting factor (or the max extra amount over the normal price). 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