Final Ones Flashcards
Labour Rate Variances
Calculated by comparing actual cost of hours worked vs. standard cost of the hours worked
Actual hours x actual rate
-
Actual hours x standard rate
Rate and Efficiency Variances Grid
Actual hours x actual rate Rate variance Standard cost of hours worked Actual hours x standard rate Efficiency variance Standard cost of output
Idle Time Variance
Idle time
X
Hourly labour rate
ALWAYS ADVERSE
Breakeven point in units
Fixed costs
/
Contribution per unit
Breakeven point in sales
Fixed costs / Contribution per unit X Selling price
OR
fixed costs
/
Contribution to sales ratio
Margin of safety in units
Budgeted sales - Breakeven sales
Margin of safety %
Budgeted sales - Breakeven sales
/
Budgeted sales
Sales required for a target profit
Fixed costs + profit
/
Contribution per unit
OR
fixed costs + profit
/
Contribution to sales ratio
Contribution per unit of limiting factor
Contribution per unit
/
Units of limiting factor
Optimal production plan
1 establish the limiting factor
2 calc contribution per unit
3 calc contribution per unit of limiting factor
4 rank the products on contribution per unit of limiting factor
5 allocate limited factor to highest ranking product
6 carry on until all of the limited factor has been used up
Make or buy decisions spare capacity
Variable cost of internal manufacture
+
Any fixed costs directly related to the product
Make or buy decisions no spare capacity
Variable cost of internal manufacture
+
Any fixed costs directly related to the product
+
The opportunity cost of internal manufacture I.e. Contribution lost from another product due to making the new one
Normal Loss
Total input costs - Scrap value of normal loss / Expected output
Abnormal losses
Valued at the same rate as good output
Equivalent unit costs
1 draw up process account and enter known costs
2 create a workings table
3 calc costs per equivalent units
4 show costs in process account and balance
