31 terms

# Cost Accounting Formulas

This are the formulas we need to memorize in cost accounting
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Prime Cost
Direct Material+Direct Labor
Conversion costs
Direct manufacturing labor costs
Contribution margin
Total revenues - Total variable costs
Contribution margin per unit
Selling price - variable cost per unit
Contribution Margin
Contribution margin per unit x number of units sold
Contribution margin % (ratio) (CMP)
Contribution margin per unit (CMPU)
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selling price (SP)
Contribution margin
Contribution margin % (CMP) x Revenues (in dollars)
Operating Income (equation method)
Revenues - Variable costs (VC) - Fixed costs (FC)
Revenues (equation method)
Selling price (SP) x Quantity of units sold (Q)
Variable Cost (equation method)
Variable cost per unit (VCU) x Quantity of units sold (Q)
Operating Income (equation method)
[(SP x Q)] - (VCU x Q)] - FC
Operating income
[(SP - VCU) - Q] - FC
Operating income (Contribution margin method)
(CMPU x Q) - FC
Operating Income (Break - even)
(SP x Q) - (VCPU x Q) - FC
Break even per units
Fixed costs
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Contribution margin per unit
Break even revenues
break even number of units x SP
Break even revenues
FC
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CM%
Target Operating income (TOI)
[(SP x Q) - (VCPU x Q)] - FC
Target Operating income (TOI)
(CMPU x Q) - FX
Quantity of units required to be sold
FC + TOI
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CMPU
Net Income
Operating Income - Income Taxes
Target net income (TNI)
TOI - (TOI x Tax rate)
Target net income (TNI)
TOI x (1 - tax rate)
Margin of safety in dollars
Budgeted (or actual) Revenues - Breakeven revenues
Margin of safety (in units)
Budgeted (or actual) sales quantity - Breakeven quantity
Margin of safety
Budgeted revenues - Breakeven revenues
Margin of safety (in units)
Budgeted sales (units) - Breakeven sales (units)
Margin of safety %
Margin of safety in \$
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Budgeted (or actual) revenues
Degree of operating leverage
Contribution margin
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Operating income
Overhead allocated to product
Indirect-cost rate x Product quantity of allocation base
What is the activity-based approach to designing a costing system?
An activity-based approach refines a costing system by focusing on individual activities as the fundamental cost objects. It uses the cost of these activities as the basis for assigning costs to other cost objects such as products or services.