Midterm 2 Flashcards
VARIABLE costing manufacturing cost per unit
DM
DL
VMOH
Total manu cost
ABSORPTION costing manufacturing cost per unit
DM
DL
FMOH
VMOH
Total manu cost
ABSORPTION costing income statement
Company name
Absorption costing income statement
For year ended Dec 31, 2020
Sales
Less: COGS (fixed manu costs per unit x units sold)
Gross profit
Less: VS and AD exp
FS and AD exp
Net income
Variable costing income statement
Sales
Less: COGS
Variable Selling and admin exp
Contribution margin
Less: FMOH
FS and AD exp
Net income
Reconciling absorption vs. Variable costing incoming numbers
Absorption Net income
Variable Net income
Difference
Variance
Beg inv
End inv
Difference
*fixed cost $ per unit
Difference in $
Produced < Sold
Variable costing net income is higher
Produced > sold
Absorption net income is higher
Variable income statement (chapter 6)
Sales
Less: vc
Contribution margin
Less: fc
Income before income tax
Less: income tax
Net income
Formula: net income b4 tax
sales - variable cost - fixed cost
Formula: contribution margin
Sales - variable costs
Formula: Contribution margin per unit
Per unit SP - per unit VC
Formula: CM ratio
CM per unit/SP
Formula: break even point in $
Fixed cost/contribution margin
Formula: break even point in units
Fixed cost/CM per unit
Formula: required sales in $ for target operating income
(Fixed cost + target operating income)/CM Ratio
Formula: Required sales in unit for target operating income
(Fixed cost + target operating income)/CM per unit
Formula: operating income b4 taxes
Operating income after tax/(1-tax rate)
Formula: Margin of safety in $
Actual sales - break even sales
Formula: Margin of safety ratio
Margin of safety/actual sales
Formula: weighted-average contribution margin in units
Unit CM product A * Sales mix % + unit CM product B * sales mix %…
Formula: Weighted-average contribution in $
CM ratio product a * sales mix…
Chapter 7: incremental analysis (income statement)
Sales. Per unit. Total. $xxxxx
DM
DL
VOH
FOH
Gross profit
L: VS and Ad exp
Net income
Special Order questions
- Do you have capacity?
- How do you treat fixed costs? (usually don’t include)
- Are there and special considerations? (Vs and ad expenses)
Special order pricing (xxx units) and the profit
Sales
______
DM
DL
VOH
fixed cost if it says
Total cost per unit
Cost per unit
___________________________
Incremental profit per unit
x
# of units produced
____________________________
Total profit
Make or buy format
Units| P unit. Make. Buy. Net inc in de
DM
DL
VMOH
FMOH
Purchase price
____________________
Total cost to produce x units
Sell or process further format
Sell. Process furt. Net in dec
Sell per unit
-
____________________
Variable cost per unit
+
Fixed cost per unit
Total per unit cost
____________________
Net income per unit
Retain or replace
Keep equip. Replace. Net inc dec
Period of x years ———————————
Variable costs
New machines costs
