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CM IS (big formula)

SR-VC(units soldvariable SG&A per unit)+(units soldunit variable cost)

ABS SG&A= (multiply two things, then add something)

(unit variable SG&A * units sold) + total fixed costs

ABS EInventory = (divide two things, multiply by something)

(total manufacturing costs/units produced)*units in Ending inventory

Variable unit product cost= (divide two things)

total variable manufacturing costs/units produced

VAR balance sheet E INV (add three things, then divide by something, then multiply by something)

((DM+DL+var. MOH)/units produced)*units in EI

difference in opy between abs and var costing (multiply two things)

net change in units * unitized fixed MOH

how to get fixed overhead in an ending finished goods inventory budget (divide two things)

budgeted fixed overhead/budgeted direct labor hours

Ordering Costs (list them)

Processing costs, the cost of insurance for shipment, unloading and receiving costs

Carrying costs (list them)

insurance, inventory taxes, obsolescence, the opportunity cost of funds tied up in inventory, handling costs, and storage space.

stockout costs (list them)

EG lost sales, the cost of expediting, and the costs of interrupted production (e.g. idled workers).

6 reasons for carrying inventory

To balance ordering or setup costs and carrying costs. 2. to satisfy customer demand. 3. To avoid shutting down manufacturing facilities because of (a. machine failure. b. defective parts. c. unavailable parts. d. late delivery of parts.) 4. To buffer against unreliable production processes. 5. To take advantage of discounts. 6. To hedge against future price increases.

fixed cost+OPY=

Contribution Margin

CM- what = OPY

Fixed costs (total fixed MOH+total fixed SG&A)

DM price variance = (formula) (know: quantity purchased, actual price, and standard price)

quantity purchased(actual price-standard price)

DM price variance = (formula)(know: total DM purchases, standard price, and quantity purchased)

total DM purchases - (quantity purchased*standard price)

DM quantity variance= (formula)(know: standard price, actual price, quantity allowed, and quantity used)

standard price *(quantity used-quantity allowed)

DM quantity variance = (formula)(know: standard price, actual price, actual output, quantity used, and standard input ratio)

standard price *(quantity used-(actual output)(standard input ratio)

total DM variance= (formula)(know: quantity allowed, quantity used, actual price, and standard price)

(quantity used * actual price)-(quantity allowed)(standard price)

DL rate variance = (formula)(know: actual rate, hours logged, and standard rate)

hours logged (actual rate-standard rate)

DL rate variance = (formula)(know: DL cost, standard rate, and hours logged)

DL cost-(hours logged *standard rate)

DL efficiency variance = (formula)(know: hours logged, actual rate, standard rate, and hours allowed)

standard rate(hours logged-hours allowed)

DL efficiency variance= (formula)(know: actual output, standard rate, actual hours used, and standard input ratio)

standard rate ( actual hours used - (actual output)(standard input ratio))

total DL variance (formula)(know: hours logged and actual rate, and hours allowed and standard rate)

(hours loggedactual rate)-(hours allowedstandard rate)

standard unit cost (formula)(know: standard input ratio, standard price, and rate)

(standard price/rate)*standard input ratio

actual variable overhead rate (AVOR) = (formula)(know: actual overhead cost, standard price, actual price, standard input ratio, and actual direct labor hours)

actual overhead cost/actual direct labor hours

actual variable overhead = (formula)(know: actual variable overhead rate, hours allowed for production, and actual direct labor hours)

AH*AVOR (AH= actual direct labor hours)

applied variable overhead = (formula)(know: hours used for production, hours allowed for production, and standard variable overhead rate)

SH*SVOR (SH= hours allowed for actual production, SVOR = standard variable overhead rate)

Total variable overhead variance = (formula)(know: standard variable overhead rate, actual variable overhead rate, actual direct labor hours used, budgeted hours used)


Variable overhead efficiency variance =(formula)(know: Actual hours worked, hours allowed, Actual variable overhead rate, and standard variable overhead rate)


hours allowed (SH)= (know: actual output, standard input ratio, and actual variable overhead rate)

(actual output) * (standard input ratio)

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