Formulas Flashcards
1
Q
How is cost of sales calculated?
A
(Opening inventory + purchases) - closing inventory
2
Q
How it inventory costed?
A
- Production cost. (Labour + material costs) x quantity
- Net realisable value. Selling price - selling costs. Think auction houses.
The lower of these two will be chosen according to the prudence convention.
3
Q
How is straight line depreciation calculated?
A
(Cost of an asset - residual value)/useful life of an asset
4
Q
How is straight line depreciation calculated?
A
(Cost of an asset - residual value)/useful life of an asset
5
Q
How is the reducing balance method of deprecation calculated?
A
Depreciation rate(%) x carrying amount.
6
Q
How is weighted average costs calculated?
A
Cost of goods sold/units available for resale
