Cost Accounting Flashcards
What is the Flexible Budget Equation?
y = A + Bx TC = Fixed + V(x)
What are prime costs?
Direct Materials + Direct Labor
What are conversion costs?
Direct Labor + MF Overhead
What are product costs?
DM DL MF Overhead Normal spoilage Scrap
What are period costs?
SGA
Marketing
Abnormal spoilage
What is the formula to apply overhead?
Estimated OH Costs / Estimated DL $ or hours
x
Actual production
What is journal entry to record applied OH?
DR WIP Control
CR Factory OH Applied
What is journal entry to record actual OH?
DR Factory OH Control
CR Cash
What is formula for Direct Materials Used?
Beginning DM \+ Purchases = Available - Ending DM = DM Used
What is formula for Cost of Goods Manufactured?
Beginning WIP \+ DM Used \+ DL Incurred \+ OH Applied = WIP Available - Ending WIP = CoGM
What is formula for COGS?
Beginning FG \+ CoGM = FG Available - Ending FG = COGS
What is I/S format for Absorption Costing?
Sales - Var COGS - Fixed COGS = Gross Margin - Var SGA - Fixed SGA = Operating Income
What is I/S format for Variable Costing?
Sales - Var COGS - Var SGA = Contribution Margin - Fixed MF Costs - Fixed SGA = Operating Income
What is the difference in operating income between Absorption and Variable Costing?
Fixed MF Overhead per unit times increase of decrease in inventory
EI = BI, same
EI > BI Absorption has higher income
EI < BI Variable has higher income
What is the formula for Break Even in units?
Fixed costs + Profit / CM per unit
$/$ = non $
What is the formula for Break Even in dollars?
Fixed costs + Profit / CM Ratio (CM/Sales price)
$/non $ = $
What is the Margin of Safety?
Total Sales - Break Even Sales
What is Theoretical Capacity?
Output is produced efficiently 100% of the time
What is Practical Capacity?
Theoretical capacity is adjusted for non production time
What is Normal Volume?
Theoretical capacity is adjusted for long run demand or multiple years
What is Expected Annual Capacity?
Theoretical capacity is adjusted for output in the current year
What is the formula for DM Price Variance?
AQ (SP - AP)
Purchasing dept has control
What is the formula for DM Usage Variance?
SP (SQ - AQ)
Production dept has control
What is the formula for DL Rate Variance?
AH (SR - AR)
H/R dept has control
