Formulas Flashcards
Basic Cost Flow Model
Beginning Balance + Transfers In - Transfers Out = Ending Balance
Predetermined Overhead Rate
Estimated Overhead / Estimated Allocation Base
Job using Job Costing
- Select allocation base for computing predetermined rates.
- Estimate overhead for each overhead cost pool.
- Calculate the predetermined rates.
- Record direct costs for each job.
- Apply overhead using predetermined rates.
- If there is over- or undersupplied overhead, either write it off directly to Cost of Goods Sold or allocate it to Cost of Goods Sold and ending inventories.
Beginning work in process inventory + units started =
= Units transferred out + ending work in process inventory
Units transferred out + ending work in process inventory =
= Beginning work in process inventory + units started
Total costs to be accounted for
Cost in beginning wip inventory + costs incurred in this period
Weighted-average process costing
(work in process costs + current period costs) / (work in process EU + current period EU)
FIFO process costing
(work in process costs / work in process EU) + (current period costs / current period EU)
Cost per equivalent unit
Current period costs / equivalent units of production current period
Product costs
- Record physical flow of resources
- Compute equivalent units of production
- Identify total costs to be accounted for
- Compute costs per equivalent unit
- Assign costs to batches of work
Total service department costs
Direct costs of the service department + Cost allocated to the service department
Units in ending inventory
Units in beginning inventory + required production - budgeted sales
Required material purchases
Materials to be used in production + estimated ending materials inventory - estimated beginning materials inventory
Required production
Budgeted sales + units in ending inventory - units in beginning inventory
Divisional income
Divisional revenues - divisional costs
Gross margin ratio
Gross margin / Sales
Operating margin ratio
Operating income / Sales
Return on investment
After-tax income / Divisional assets = (After-tax income / Sales) x (Sales / Divisional assets)
Cost of invested capital
Cost of capital x Assets invested
Residual income
After-tax income - (Cost of capital x Divisional assets)
Economic value added
Annual after tax divisional income - total annual cost of capital
Price variance
(AP x AQ) - (SP x AQ) = (AP - SP) x AQ
Efficiency variance
(SP x AQ) - (SP x SQ) = SP x (AQ - SQ)
Standard cost allowed
SP x AQ
Standard (or predetermined) fixed production overhead cost
Budgeted fixed manufacturing cost / budgeted activity level
Manufacturing cycle efficiency
Processing time / (Processing time + moving time + storing time + inspection time)
Partial productivity
Output / Single input
Productivity
Output / Input
