Mod 46: Cost Measurement Formulas

Question 1

Fixed overhead equation

Answer 1

Fixed overhead = est. fixed overhead costs/normal capacity

Question 2

EUPs

Answer 2

Equivalent units of production

Question 3

EFUs

Answer 3

Equivalent finished units

Question 4

Cost of Goods Purchased Equation 6

Answer 4

Gross Purchases
- Purchase Discounts
- Purchase Returns and Allowances
= Net Purchases
\+ Freight in
= Cost of Goods Purchased

Question 5

Process Costing Equivalent Units of Production (EUPs) or Equivalent Finished Units (EFUs). 4 steps

Answer 5

1 Calculate the number shipped
2 Calculate the equivalent finished units
3 Calculate cost per EFU
4 Complete the WIP T account

Question 6

Process Costing Equivalent Units of Production (EUPs) or Equivalent Finished Units (EFUs): step 1 calculate the number shipped 5

Answer 6

Beginning Inventory
\+ Units Started
= Units to be accounted for
- ending inventory
= units shipped

Question 7

Process Costing Equivalent Units of Production (EUPs) or Equivalent Finished Units (EFUs). Step 2 calculate the equivalent finished units FIFO 4

Answer 7

Units shipped
+ end inv. (EFUs)
- beg. Inv. (EFUs)
= FIFO EFUs

Question 8

Process Costing Equivalent Units of Production (EUPs) or Equivalent Finished Units (EFUs). Step 2 Calculate the equivalent finished units 3

Answer 8

Units shipped
+ End Inv. (EFUs)
= W/A EFUs

Question 9

Process Costing Equivalent Units of Production (EUPs) or Equivalent Finished Units (EFUs). Step 3 calculate the cost per EFU FIFO

Answer 9

Cost per EFU = Current costs only/EFUs

Question 10

Process Costing Equivalent Units of Production (EUPs) or Equivalent Finished Units (EFUs). Step 3 Calculate the cost per EFU Weighted Average

Answer 10

Cost per EFU = (Beg. Inv. + Current Costs)/EFUs

Question 11

Calculate net income under the direct or variable costing 7

Answer 11

Sales
- variable COGS
= manufacturing Contribution Margin
- Variable Period Costs
= Contribution Margin
- Fixed Costs
= net income

Question 12

Calculate net income under absorption or full costing method 5

Answer 12

Sales
- COGS
= Gross Profit
- Period Costs
= net income

Question 13

If production > sales, ending inventory

Answer 13

Increases

Question 14

If production

Answer 14

Decreases

Question 15

Variable overhead equation

Answer 15

Variable overhead = est. variable OH costs/est. actual activity level

Question 16

When variable manufacturing overhead is under applied you…

Why?

Answer 16

Debit cost of goods sold

Applied overhead increases