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CMA Exam > Formula > Flashcards

Formula Flashcards

1
Q

Cost of good sold =

A

Beginning finish goods inventory
+ Purchases or Cost of good manufactured
- Ending finish inventory

Cost of goods sold includes direct materials, direct labor and overhead applied. Selling and administrative costs are not part of the cost of goods sold.

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2
Q

Prime Cost =

A

direct material used + direct Labor used

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3
Q

FIFO EUP =

A

Under the FIFO method of process costing we need to make three calculations to determine the EUP.

(1) how many EUP were required to finish BWIP,
(2) how many units were started and completed and
(3) how many EUP were needed to start the EWIP.

Formula:

Completion of Beginning WIP (Beginning WIP inventory - % of Completed)
+ started and completed (Completed Unit - Beginning WIP Inventory)
+ Ending % completed

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4
Q

ROI

A

Income from Operation before taxes ➗ Average of operating assets

Average operating assets = (assets at the beginning of the year + assets at the end of the year) ◘➗ 2

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5
Q

Goods available for sales =

A

Cost of good sold

+ Ending inventory

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6
Q

Conversion cost =

A

Direct labor

+manufacturing OH

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7
Q

Manufacturing contribution margin =

A

Net sales

- Variable cost

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8
Q

Cost of goods manufactured (Cost of goods transferred to finished goods inventory) =

A

beginning WIP inventory + direct labor used + direct materials used + overhead applied − ending WIP inventory.

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9
Q

Cost of goods manufactured

Second formula

A 
Sales 
-Gross profit
=Cost of Good Sold
\+ ending finish good 
= goods available for sales 
- beginning finish good
= Cost of goods manufactured
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10
Q

What is the formula for Projected Benefit Obligations (PBO)

A 
PBO at the beginning of the year 
\+ Service Cost 
\+ Interest Cost
- retirement benefit paid 
= PBO at the end of the year
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11
Q

Fair market value of retirement plan assets=

A 
FMV at the beginning of the year 
\+ actual return 
\+ employer contribution
- retirement benefit paid 
= fav at the end of the year
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12
Q

Residual income =

A

Operating Income - (Average assets X require rate of returns )

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13
Q

Net Income =

A 
Income before income tax and extra ordinary item
-Income tax
=Income before extra ordinary item
\+/- Extra ordinary gain (loss)
= Net Income
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14
Q

Total Equity =

A 
Common Stock
\+Preferred Stock 
\+Additional paid in Capital
\+Retained Earning
-Treasury Stock
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15
Q

Total Risk =

A

Inherent Risk X Control Risk X Detection Risk

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16
Q

Contribution Margin =

A

Sales Revenue - All Variable Cost (Both Manufacturing and Sell & Admin cost)

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17
Q

Segment Margin =

A

Contribution Margin for the segment - Fixed Cost

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18
Q

Regression Equation

A

Y = F + Vx

Where
Y = Dependent variable - Total Cost
F = y intercept ( Constant) - Fixed Cost
V = Slop of the line - Variable Cost
X = independent variable - Production Level

19
Q

Exponential Smoothing

A

With Exponential Smoothing, the equation for a particular forecasting period is:

Ft+1 = a(Xt) + (1-a)Ft
Where 
    xt = the actual value at period t
     t = the most recent time period
     a= the smoothing constant
     Ft= the forecast for period t
20
Q

How is Sum of the Year Depreciation is Calculated?

A

Sum of the Year Depreciation is calculated by:

The depreciation amount (Cost - Salvage Value) X fraction.

the numerator of the fraction is N (#of year remaining useful live, including the current year).

The denominator is the useful live of the assets : Ex-5yr useful live = 5+4+3+2+1=15

21
Q

How is Double Decline Depreciation is Calculated?

A

Double Declining Depreciation is calculated by:

The book value of the asset at the beginning period X Twice the straight-line depreciation percentage.

The full cost is depreciated but not below the salvage value.
Salvage value is not taking into consideration when calculating the depreciation expense. The salvage value is taking into consideration at the end of the of the useful live.

22
Q

How is the depreciation calculated under the straight-line method?

A

Under straight-line depreciation, the depreciation expense is calculated as follows:

(the cost of the asset − salvage value) ÷ useful life

23
Q

How is the depreciation calculated under the units of production method?

A

The depreciable amount (original cost − salvage value) is multiplied by the percentage of the total expected output that was produced during the period.

24
Q

What is the formula for pension expenses?

A

Pension Expenses consist of the following cost:

    Service cost
\+  Interest cost
-   Expected return on plan assets
±  Amortization of net gain or loss
±  Amortization of prior service cost of credit
=  Pension expense
25
Q

How is the profit calculate using the installment sales method?

A

cash received this period X the profit % on the sale.

Profit % on the sales = profit from the sale divided by the sales price

26
Q

Gross Margin (Gross Profit)=

A

Sale Price- Total COGS

27
Q

What is the formula for total manufacturing cost?

A

Total manufacturing costs = direct materials used +direct labor used + overhead applied

28
Q

weighted-average method - EUP

A

Under the weighted average method, we need to include the work that was in BWIP as well as the work actually done during the period. As a result, the calculation of EUP has only two parts :

(1) units completed and
(2) units started that were in EWIP at the end of the period.

Formula:

Units Completed=Started and Completed
+% of Complete in EWIP
= total EUP for Weighted Average

The EUP under the weighted average method will never be lower than the EUP for FIFO.

29
Q

What is the formula for Total Spoilage Unit?

A

Total spoilage = Beginning units + Units Started − Units completed & transferred out − Ending units

30
Q

What is the formula for Learning Curve?

A

First Unit require X 2 X LC%

31
Q

What is the labor rate (price) variance formula?

A

(AP - SP) X AQ

32
Q

What is the labor efficiency (Quantity) Variance?

A

(AQ - SQ) X SP

33
Q

What is the Sales Volume Revenue Variance?

A

The sales volume variance =(Actual Sales Volume − Budgeted Sales Volume) × Standard Contribution per Unit.

34
Q

What is the formula for FOH Spending Variance

A

Flexible/Static Budget - Actual Costs incurred

35
Q

What are the four components of a time series?

A
  1. Trend
  2. Cyclical
  3. Seasonal
  4. Irregular
36
Q

What is the formula for Return on Sales?

A

Return on sales = Operating income ÷ Sales

37
Q

What is the budget starting order?

A
  1. Sales Budget
  2. Production Budget
  3. Direct Material Budget
  4. Direct Labor Budget
38
Q

Sales (revenue) budget

A

It is the outgrow of the sales forecast. Must have the sales units and sales revenue

39
Q

Production budget

A
  1. Concerns with the unit only
Formula for production budget
       Sales in unit
Add: Desired ending inventory
Less: Beginning Inventory
=  Units to produce
40
Q

Direct Labor Budget

A

Direct labor budget start with production budget.

   Unit to produce
X Direct Labor hours needed    per unit
= Projected total direct labor hours
X Direct Labor cost per hour
=Projected Direct labor cost
41
Q

What is the order of the production budget?

A

In the operating budget, the emphasis is on obtaining and using current resources.

1) Sales budget
2) Production budget
3) Direct materials budget
4) Direct labor budget
5) Manufacturing overhead budget
6) Ending finished goods inventory budget
7) Cost of goods sold budget
8) Non-manufacturing budget
9) Pro forma income statement

42
Q

What is the financial budget and the order of the budget?

A

In the financial budget, the emphasis is on obtaining the funds needed to purchase operating assets. It contains the

1) Capital budget
2) Projected cash disbursement schedule
3) Projected cash collection schedule
4) Cash budget - The most important part of the budget
5) Pro forma balance sheet
6) Pro forma statement of cash flows

43
Q

How to calculate the flexible budget amount for sales

A

Actual Sales units
X Average Budgeted Price
= Flexible Budget Amount for Sales

44
Q

How is the Material Yield Variance calculated ?

A

)Total standard quantity

-Total actual quantity ) X Standard mix of standard input at standard price

CMA Exam (3 decks)

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