Cost Accounting Formulas And Terminologies
1.Prime Cost= Direct Material + Direct Labor2.
2.Total Production Cost= Prime Cost + FOH Cost3.
3.Conversion Cost= Direct Labor + FOH Cost4.
4.Raw Material Consumed= Raw Material Opening + Material Purchases – Material Closing
5.Manufacturing Cost= Prime Cost + FOH Cost
{Same as Sr. No.2}
6.Cost Of Goods Manufactured= Manufacturing Cost + Opening WIP – ClosingWIP7.
7.Goods Available for Sale= Cost Of Goods Manufactured + Opening Finished Goods8.
8.Cost of Goods Sold= Goods Available for Sale – Closing Finished Goods9.
9.Contribution Margin= Sales – Variable Cost10.
10.Income Statement= Gross Profit – Operating Expenses11.
11.Income Statement= (Sale-COGS) – (Selling + Admin + MarketingExpenses)12.
12.Applied FOH Rate
13.FOH Rate= Total FOH Cost x 100 = Answer %
{Based on Labor Cost}
Labor Cost
14.FOH Rate= Total FOH Cost x 100 = Answer %
{Based on Material}
Material Cost
15.FOH Rate= Total FOH Cost x 100 = Answer %
{Based on Prime Cost}
Prime Cost
16.FOH Rate= Budgeted FOH Cost = Answer Rupees
{Based on Labor Hours}
17.FOH Rate= Budgeted FOH Cost= Ans Rupees{Based on Machine Hours}
18.Per Unit Cost= Cost of Goods ManufacturedNo. of Units Produced19.
19.Re-Order Period= Lead Time20.
20.EOQ= Re-Order Quantity21.
21.Re-Order Level= (Max Consumption) x (Max Lead Time)22.
22.Max Stock Level= Re-Order Level – (Min Consumption) x (Min Lead Time) + EOQ23.
23.Min Stock Level= Re-Order Level – (Avg Consumption) x (Avg LeadTime)24.
24.Danger Stock Level= (Avg Consumption) x (Emergency Lead Time)25.
25.Average Stock Level= Min Stock Level + Max Stock Level226.
26.Average Stock Level= Min Stock Level + Re-Order Quantity227.
27.Average Stock Level= Min Stock Level + EOQ228.
28.EOQ= 2 (Annual Units Consumption) x (Cost per Order)(Cost per unit of Material) x (Carrying Cost Percentage)29.
29.Safety Stock= (Annual Demand) x (Max Lead Time – Min Lead Time)365 x (Avg Lead Time)30.
30.Inventory Turnover Ratio= Material Consumed = Answer TimesAvg Inventory
31.Inventory Holding Period= No. of days in year = 365Inventory Turnover Ratio InventoryTurnover Ratio
Labor
Premium Bonus Plans
32.Halsey Bonus Plan= (Time Allowed – Time Saved) x (Rate per Labor Hour)233.
33.Halsey-Weir Premium Bonus Plan= (Time Allowed – Time Saved) x (Rate per Labor Hour)334.
34.Rowan Premium Plan
Step-I
Bonus Rate = Time Saved x 100 = Answer %Time Allowed
Step-II
Bonus Pay = (Basic Pay) x (Bonus Rate %) = Answer Rupees
Step-III
Now Total Pay = Basic Pay + Bonus Pay
Piece Rate System
Notes to Absorption Costing:
Over/Under Applied FOH
Budgeted Production (Budgeted units x Fixed FOH Rate/unit) XXXX
(-) Actual Production (Actual units x Fixed FOH Rate/unit) (XXXX)
Over/Under Applied FOH XXXX
If Actual Production> Budgeted Production^Over Applied FOH
If Actual Production < Budgeted Production ^ Under Applied FOHf.
If Over – Applied FOH ^ Minus from COGS at Actualg.
If Under – Applied FOH ^ Add in COGS at Actualh.
Absorption Costing leads to Gross Profit (GP) then Net Profit.
Confusing Terminologies of Cost Accounting
1.Inventory = Stock
2.Re-Order Period = Lead Time
3.EOQ = Re-Order Quantity
4.Standard = Budgeted
5.Marginal Costing = Direct Costing
6.Absorption Costing = Full Costing = Factory Cost = Production Cost
7.Total Production Cost = Manufacturing Cost
Dear,
above mentioned formulas are very help full for all of new student like me who are studying cost accounting thank your for your support.
Regards
Toufique Ahmed.
thanks