Create an account
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
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.
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)
Please allow access to your computer’s microphone to use Voice Recording.
Having trouble? Click here for help.
We can’t access your microphone!
Click the icon above to update your browser permissions and try again
Reload the page to try again!Reload
Press Cmd-0 to reset your zoom
Press Ctrl-0 to reset your zoom
It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.
Please upgrade Flash or install Chrome
to use Voice Recording.
For more help, see our troubleshooting page.
Your microphone is muted
For help fixing this issue, see this FAQ.
Star this term
You can study starred terms together