MAC Flashcards
Economic Order Quantity (EOQ)
= Root (2 x order cost x annual demand
/one year storage cost)
Overhead absorption rate (OAR)
= Overhead / basis of activity
Entry for Abnormal gain
Cr P+L
Entry for Abnormal loss
Dr P+L
Entry for Normal loss
Dr P+L
Entry for an over absorption
Cr P+L
Entry for an under absorption
Dr P+L
Absorption costing
Everything except fixed overheads (operational)
Marginal costing
Variable costs
Valuing losses (cost per unit)
= input cost - value of loss
/input units - units lost
Break even point
= Overheads
/contribution per unit
Contribution per unit
Selling price - Variable costs
Margin of safety
Budget sales units - break even point units
If asked for total cost of hours
Hourly rate (+any bonus) X hours
If asked for cost of an overtime premium
Just the bonus bit (quarter or half) X hours
