Summary of Important 4.

Adjusted COGS 5 Unadjusted COGS 6 Overhead variance

(Note: Applied overhead . Actual overhead means overapplied
EquatIonS overhead
Applied overhead , Actual overhead means underapplied overhead)
Estimated departmental overhead
Chapter 2 5. Departmental overhead rate 5
Estimated departmental activity level
1. Total product cost 5 Direct materials 1 Direct labour 6. Total product cost 5 Total direct materials 1 Total direct labour
1 Manufacturing overhead 1 Applied overhead
Total product cost Total product cost
2. Unit product cost 5 7. Unit product cost 5
Number of units Number of units
3. Prime cost 5 Direct materials 1 Direct labour
4. Conversion cost 5 Direct labour 1 Manufacturing overhead Chapter 6
5. Direct materials used in production 5 Beginning inventory of materials
1 Purchases Total cost
1. Unit cost 5
2 Ending inventory of materials Equivalent units
6. Cost of goods manufactured 5 Direct materials used in production 2. Units started and completed 5 Total units completed 2 Units in BWIP
1 Direct labour used in production 3. Units started 5 Units started and completed 1 Units in EWIP
1 Manufacturing overhead costs used 4. Total manufacturing costs 5 BWIP for period 1 Costs added in period
in production 5. Cost of units started and completed 5 Unit cost 3 Units started and
1 Beginning WIP inventory completed
2 Ending WIP inventory 6. Cost of finishing units in BWIP 5 Prior period costs
7. Cost of goods sold 5 Beginning finished goods inventory 1 (Unit cost 3 Equivalent units to
1 Cost of goods manufactured complete)
2 Ending finished goods inventory Total costs for the period
7. Unit cost 5
Number of services provided
Chapter 3 Total costs for the period
8. Unit cost 5
Total output of the period
1. Cost formula: Total cost 5 Total fixed cost
1 (Variable rate 3 Units of output)
2. Total variable cost 5 Variable rate 3 Units of output Chapter 8
1. Absorption costing product cost 5 Direct materials 1 Direct labour
Chapter 4 1 Variable manufacturing overhead
1. Sales revenue 5 Price 3 Units sold 1 Fixed overhead
2. Operating income 5 (Price 3 Units sold) 2. Variable costing product cost 5 Direct materials 1 Direct labour
2 (Unit variable cost 3 Units sold) 2 Fixed cost 1 Variable manufacturing overhead
Fixed cost 3. Total inventory-related cost 5 Ordering cost 1 Carrying cost
3. Break { even point in units 5 4. Ordering cost 5 Number of orders per year 3 Cost of placing one order
(Price 2 Unit variable cost)
Units in order
Total contribution margin 5. Average number of units in inventory 5
4. Contribution margin ratio 5 2
Sales
6. Carrying cost 5 Average number of units in inventory 3 Cost of carrying
or one unit of inventory

Î
(Price 2 Unit variable cost)
5 2 3 CO 3 D
Price 7. EOQ 5
Total variable cost CC
5. Variable cost ratio 5 8. Reorder point without safety stock 5 Daily usage 3 Lead time
Sales
9. Safety stock 5 (Maximum daily usage 2 Average daily usage) 3 Lead time
or
10. Reorder point with safety stock 5 (Average daily usage 1 Safety stock)
Unit variable cost
5 3 Lead time
Price
Fixed cost
6. Break { even point in sales dollars 5 Chapter 9
Contribution margin ratio
or 1. Units to be produced 5 Expected unit sales
Fixed cost 1 Units in desired ending inventory (EI)
5 2 Units in beginning inventory (BI)
1 2 Variable cost ratio
7. Margin of safety 5 Sales 2 Break-even sales 2. Purchases 5 Direct materials needed for production
Total contribution margin 1 Direct materials in desired ending inventory (EI)
8. Degree of operating leverage 5 2 Direct materials in beginning inventory (BI)
Operating income
3. For retail firms: Units to be purchased
9. Percentage change in profits 5 Degree of operating leverage
5 Expected unit sales 1 Units in desired ending inventory (EI)
3 Percentage change in sales
2 Units in beginning inventory (BI)
Chapter 5
Chapter 10
Estimated annual overhead cost
1. Predetermined overhead rate 5 1. MPV 5 (AP 2 SP)AQ
Estimated annual activity level
2. MUV 5 (AQ 2 SQ)SP
2. Applied overhead 5 Predetermined overhead rate
3. LRV 5 (AR 2 SR)AH
3 Actual activity usage
4. LEV 5 (AH 2 SH)SR
3. Overhead variance 5 Applied overhead 2 Actual overhead
Chapter 11 6. EVA 5 After-tax income 2 (Actual percentage cost of capital
3 Total capital employed)
Abbreviations:
Total time
AH 5 actual direct labour hours 7. Theoretical cycle time 5
Number of units produced under ideal conditions
SH 5 standard direct labour hours that should have been worked for
Total time
actual units produced 8. Actual cycle time 5
AVOR 5 actual variable overhead rate Actual number of units produced
SVOR 5 standard variable overhead rate Number of units produced under ideal conditions
9. Theoretical velocity 5
SFOR 5 standard fixed overhead rate Total time
BFOH 5 budgeted fixed overhead Actual number of units produced
10. Actual velocity 5
Total time
1. Variable overhead spending variance 5 (AVOR × AH) – (SVOR × AH) Conversion cost
5 (AVOR 2 SVOR)AH 11. Standard cost per minute 5
Minutes available
2. Variable overhead efficiency variance 5 (AH – SH)SVOR
Budgeted fixed overhead costs Processing time
3. SFOR 5 12. MCE 5
Practical capacity (Processing time 1 Nonprocessing time)
4. Applied fixed overhead 5 SFOR × SH
5. FOH spending variance 5 Actual fixed overhead 2 Budgeted fixed overhead Chapter 13
6. FOH volume variance 5 Budgeted fixed overhead 2 Applied fixed overhead
5 BFOH 2 (SH 3 SFOR) 1. Contribution margin per unit of scarce resource
Contribution margin per unit
5
Amount of scarce resource to make one unit
Chapter 12 2. Price using markup 5 Cost per unit
Operating income 1 (Cost per unit 3 Markup percentage)
1. ROI 5
Average operating assets 3. Target cost 5 Target price 2 Desired profit
ROI 5 Margin 3 Turnover
2. Average operating assets Chapter 14
(Beginning operating assets 1 Ending operating assets)
5 1. NPV 5 [SCFty(1 1 i)t] 2 I
2
5 [SCFt dft] 2 I
Operating income
3. Margin 5 5P2I
Sales
SCFt
Sales 2. I 5 , where i is the IRR.
4. Turnover 5 (1 1 i)t
Average operating assets
5. Residual income 5 Operating income 2 (Minimum rate of return 3 Cdt 1 1 0.5k
3. PV 5 3
Average operating assets) d1k 11k