ACCA MA Formulas Cheat Sheet: Every Calculation You Need for Management Accounting

This ACCA MA formulas cheat sheet puts every core Management Accounting calculation on one page: variances, inventory control, overheads, labour ratios, budgets and performance measures. ACCA gives you a short formulae sheet in the exam, but it does not cover most of what MA tests, so the formulas below are the ones you need to know by heart.

MA is a two-hour computer-based exam with 35 two-mark objective test questions and three 10-mark multi-task questions on budgeting, standard costing and performance measurement (ACCA's syllabus, as of October 2026). Most marks come from calculations, so speed with these formulas matters more than anything else.

What ACCA Gives You in the Exam

The MA exam includes a formulae sheet. It has covered regression analysis (the a and b coefficients), the correlation coefficient, the economic order quantity and the economic batch quantity. Check the sheet in ACCA's specimen exam on the CBE Practice Platform so you know exactly what is provided. Everything else on this page you must learn.

Cost Behaviour and Overheads

High-Low Method

• Variable cost per unit = (cost at highest activity − cost at lowest activity) ÷ (highest activity − lowest activity)
• Fixed cost = total cost at either level − (variable cost per unit × activity at that level)

Trap: pick the highest and lowest activity levels, not the highest and lowest costs. If there is a step in fixed costs, adjust for it first.

Overhead Absorption

• Overhead absorption rate (OAR) = budgeted overheads ÷ budgeted activity level
• Overheads absorbed = OAR × actual activity
• Over- or under-absorption = overheads absorbed − actual overheads (positive means over-absorbed)

Trap: the rate always uses budgeted figures; the absorbed amount always uses actual activity.

Absorption vs Marginal Costing Profit

• Profit difference = change in inventory (units) × fixed overhead absorbed per unit

If inventory rises, absorption costing profit is higher, because some fixed overhead is carried forward in closing inventory. If inventory falls, marginal costing profit is higher.

Inventory Control

• Economic order quantity (EOQ) = √(2 × Co × D ÷ Ch), where Co is the cost per order, D annual demand and Ch the holding cost per unit per year (given on the formulae sheet)
• Re-order level = maximum usage × maximum lead time
• Maximum inventory level = re-order level + re-order quantity − (minimum usage × minimum lead time)
• Minimum inventory (buffer) level = re-order level − (average usage × average lead time)
• Average inventory = buffer inventory + (re-order quantity ÷ 2)

Trap: check the units of the holding cost. If it is given as a percentage of purchase price, convert it into a cost per unit first.

Labour

• Labour turnover rate = (number of leavers who require replacement ÷ average number of employees) × 100%
• Efficiency ratio = (expected hours to produce actual output ÷ actual hours worked) × 100%
• Capacity ratio = (actual hours worked ÷ budgeted hours) × 100%
• Production volume (activity) ratio = (expected hours to produce actual output ÷ budgeted hours) × 100%

A quick check: efficiency ratio × capacity ratio = production volume ratio.

Standard Costing Variances

Write every variance as "should have cost" versus "did cost." If actual is better than standard, the variance is favourable.

Materials

• Price = (actual quantity × standard price) − actual cost
• Usage = (standard quantity for actual output − actual quantity used) × standard price

Labour

• Rate = (actual hours paid × standard rate) − actual cost
• Idle time = idle hours × standard rate (always adverse)
• Efficiency = (standard hours for actual output − actual hours worked) × standard rate

Variable Overheads

• Expenditure = (actual hours worked × standard rate) − actual cost
• Efficiency = (standard hours for actual output − actual hours worked) × standard rate

Fixed Overheads (Absorption Costing)

• Expenditure = budgeted fixed overhead − actual fixed overhead
• Volume = (actual output − budgeted output) × standard fixed overhead per unit
• The volume variance splits into efficiency = (standard hours for actual output − actual hours) × standard rate per hour, and capacity = (actual hours − budgeted hours) × standard rate per hour

Under marginal costing there is no fixed overhead volume variance, only the expenditure variance.

Sales

• Sales price = (actual price − standard price) × actual units sold
• Sales volume = (actual units sold − budgeted units) × standard profit per unit (absorption) or standard contribution per unit (marginal)

Traps: labour efficiency uses hours worked, not hours paid. Material price can be based on quantity purchased or quantity used; read which one the question wants. And reconcile: budgeted profit plus favourable variances minus adverse variances should equal actual profit.

Budgeting

• Production budget = budgeted sales + closing finished goods inventory − opening finished goods inventory
• Materials usage = production units × standard material per unit
• Materials purchases = materials usage + closing raw materials inventory − opening raw materials inventory
• Flexed budget cost = fixed cost + (variable cost per unit × actual activity)

Trap: compare actual results with the flexed budget, never the original fixed budget, when judging cost control.

Forecasting and Index Numbers

• Regression line: y = a + bx (a and b are on the formulae sheet)
• Additive time series: actual = trend + seasonal variation; multiplicative: actual = trend × seasonal index
• Simple price index = (price in current period ÷ price in base period) × 100
• Real value = money value × (base-year index ÷ current-year index)

Trap: under the additive model, seasonal variations should sum to roughly zero over a cycle. Under the multiplicative model, the indices should average 1 (or 100%).

Performance Measurement

Profitability

• Gross profit margin = gross profit ÷ sales × 100%
• Operating profit margin = operating profit ÷ sales × 100%
• ROCE = profit before interest and tax ÷ capital employed × 100%
• Asset turnover = sales ÷ capital employed (so ROCE = operating margin × asset turnover)

Liquidity and Working Capital

• Current ratio = current assets ÷ current liabilities
• Quick ratio = (current assets − inventory) ÷ current liabilities
• Receivables days = receivables ÷ credit sales × 365
• Payables days = payables ÷ credit purchases (or cost of sales) × 365
• Inventory days = inventory ÷ cost of sales × 365

Divisional Performance

• Return on investment (ROI) = controllable profit ÷ capital employed × 100%
• Residual income (RI) = controllable profit − (capital employed × notional cost of capital)

Trap: ROI can make a manager reject a project that earns more than the cost of capital but less than the division's current ROI. RI avoids that. Expect a question that tests this exact point.

How to Use This Sheet

• Write each formula from memory once a day for a week. Then check it against this page.
• Drill one formula family at a time with our chapter-wise ACCA MA MCQ bank, then mix them in timed tests on the MA practice page.
• Keep them warm with the daily ACCA challenge.
• For the full study plan, read how to pass ACCA MA. If you are on the Pakistan CA route, the same techniques appear in our CAF-5 guide.

A note on the 2027 changes: ACCA is restructuring the Applied Knowledge level from mid-2027, and its transition guidance says MA has an exam equivalent, K2 Management Accounting, so a pass now carries across. The techniques on this page will not go out of date. Confirm dates on accaglobal.com.

FAQs

Does ACCA give a formula sheet in the MA exam?
Yes. It has covered regression, correlation, EOQ and economic batch quantity. Variance, inventory-level, ratio and budget formulas are not provided, so learn them.

Which formulas are most important for MA?
Variances, budgeting and performance measures. Section B always has one 10-mark question on each of budgeting, standard costing and performance measurement.

How do I remember whether a variance is favourable or adverse?
Compare what it should have cost with what it did cost. Lower actual cost, or higher actual revenue, is favourable.

Is CVP analysis in ACCA MA?
Breakeven and multi-product CVP are core topics at Performance Management. Check the current MA syllabus and study guide on accaglobal.com for exactly what MA tests.