Formulas for Exam 1

Question 1

Product Costs =

Answer 1

DM + DL + MOH

Question 2

Prime Costs =

Answer 2

DM + DL

Question 3

Conversion Costs =

Answer 3

DL + MOH

Question 4

Mixed cost formula

Answer 4

Y = a + bx

Question 4

Period Costs =

Answer 4

Selling and Administrative expenses

Question 4

Total costs =

Answer 4

Fixed costs + (Variable cost per unit * Activity of Cost Driver)

Question 4

COGS =

Answer 4

Beginning Inventory + purchases - Ending Inventory

Question 4

Contribution Margin =

Answer 4

Sales - All Variable Costs

Question 5

Contribution Margin per unit =

Answer 5

Sales price - Variable Cost per unit

Question 5

MOH =

Answer 5

Indirect materials + Indirect labor + other manufacturing costs

Question 5

Cost Object Unit costs =

Answer 5

DM per unit + DL per unit + MOH applied per unit

Question 6

Applied Manufacturing Overhead =

Answer 6

POHR x Actual level of activity for the allocation base (cost driver)

Question 6

POHR =

Answer 6

Estimated Total MOH Costs / Estimate Total Amount of the allocation base (cost driver)

Question 6

Raw Materials Used in Production =

Answer 6

Beg RM Inventory + Purchases – End RM Inventory

Question 7

Cost of Goods Manufactured =

Answer 7

Beg WIP Inventory + Total Manuf Cost added to WIP – End WIP Inventory

Question 7

Total Manufacturing Costs added to Production =

Answer 7

DM used in Production + DL + MOH Applied

Question 8

What are the 4 steps to Weighted Average Equivalent Units

Answer 8

1. Compute the EU of production
2. Compute the cost per EU
3. Assign costs to units
4. Cost Reconciliation Report

Question 8

Unadjusted CofGS =

Answer 8

Beg Finished Goods Inventory + Cost of goods manufactured – Ending FG Inventory

Question 8

Overapplied Manufacturing Overhead is

Answer 8

where there is a credit balance in the MO Account
and MO Applied is more than Actual MO

Question 9

What two categories calculate EU separately

Answer 9

Materials and Conversion Costs

Question 9

Underapplied Manufacturing Overhead is

Answer 9

when there is a debit balance in the MOH Account and
MOH Applied is less than Actual MOH

Question 10

Units in Beg WIP + Units started into production (or transferred in) =

Answer 10

Units in End WIP + Units Trans Out

Question 10

EU of production =

Answer 10

Units transferred to the next department + (Ending Inventory x % Complete)

Question 10

Cost Per EU =

Answer 10

Total Costs / EU of production

Question 10

Costs accounted for =

Answer 10

Costs of units transferred out + Cost of End WIP

Question 10

Units Trans Out =

Answer 10

Units in Beg WIP + Units Started or Trans In – Units in End WIP

Question 10

Total Costs =

Answer 10

Cost of Beg WIP + Costs added during the period

Question 10

Cost Reconciliation:

Answer 10

Costs to be accounted for = Costs Accounted For

Question 10

Variable Cost Ratio

Answer 10

Total Variable Costs/Sales

Question 10

Costs to be accounted for =

Answer 10

Cost of Beg WIP + Costs added to production

Question 10

The 4 ways to calculate profit?

Answer 10

Profit = (Sales – Variable Costs) – Fixed Costs

Profit = [(Sales Price x Qty Sold) – (Variable Cost Per unit x Qty Sold)] – Fixed Costs

Profit = [(Sales Price – Variable Cost Per Unit) x Qty Sold] – Fixed Costs

Profit = (CM per unit x Qty Sold) – Fixed Costs

Question 10

Break even in Dollars

Answer 10

Fixed Costs/CM ratio

Question 10

CM Ratio

Answer 10

CM/Sales

Question 10

Break even in units

Answer 10

Fixed Costs/CM per unit

Question 10

CM Ratio (unit)

Answer 10

CM per unit/Selling Price

Question 10

units required for Target Profit =

Answer 10

= (Target Profit + Fixed Expenses)/ CM per unit

Question 11

$ sales required for Target Profit =

Answer 11

(Target Profit + Fixed Expenses)/ CM ratio

Question 12

Margin of Safety in dollars =

Answer 12

Total (Actual) Sales – Breakeven Sales

Question 13

Degree of Operating Leverage =

Answer 13

Contribution Margin/Net Operating Income