Home › Finance Formulas › Inventory Cost Formula › Finished Goods Accounting Solved Exam Docsity Inventory Formula This Only Preview Average Days Take Tur Aging Report Account Write Off Supply Total Analysis Stock Calculation

Finance Formulas / July 19, 2018 / Alia Marquez

When you make a down payment on a purchase and use a loan to pay for the remainder, you instantly reduce the amount of interest you pay over the lifetime of the loan. For example, if you borrow $100,000 on a loan with a 5% interest rate, you owe $5,000 in interest in the first year of the loan alone. However, if you have a $20,000 down payment, you only need to borrow $80,000. As a result, during the first year, your interest is only $4,000, saving you $1,000 in the first year alone. Thus, it pays to have a sizable down payment on your mortgage as it will save you thousands of dollars in interest over the lifetime of the loan.

Contribution margin is the sales price minus total variable costs, where variable costs might include materials, labor or overhead. For example, Company XYZ sells a product for $100 each. The company incurs a unit variable direct material expense of $12, unit variable labor expense of $25, $10 of variable overhead per unit and $8 of fixed overhead per unit.

66 out of 100 based on 256 user ratings

We Also Think Youâ€™ll Like

Knowingpains

Category

© 2018 Knowingpains. All rights reserved