Week 5 (Cost concepts) formulas

Question 1

Direct material used equation ?

Answer 1

Direct material used =
beginning direct materials inventory + direct materials purchased - ending direct materials inventory

Question 2

cost of goods manufactured equation ?

Answer 2

cost of goods manufactured =
beginning work in progress inventory + direct materials used + direct labor + overhead - ending work in process inventory

Question 3

cost of goods sold equation ?

Answer 3

cost of goods sold =
beginning finished goods inventory + cost of goods manufactured - ending finished goods inventory

Question 4

Prime costs equation ?

Answer 4

Prime costs =
direct materials used + direct labor

Question 5

Conversion costs equation ?

Answer 5

conversion costs =
direct labor + manufacturing overhead