ACCOUNTING FOR COSTS
VC/unit = (TCH – TCL – STEPPED COST)/(TUH – TUL)
Pie Chart Degree = (cost/TC)*360
TC of Holding = Avg. Inventory * Holding cost/unit
TC of Ordering = No. of orders * cost/order
Reorder level = Max. Usage * Max. Lead time
Max. Level = Reorder level + Reorder qty-(Min., Usage*Min. Lead time)
Min. Level = Reorder level – (Avg. Usage * Avg. Lead time)
Idle time ratio = (Idle Hrs/Total Hrs) * 100%
Labour Turnover Rate = (Replacements/Avg. No. of Employees)*100%
OAR = Budgeted overheads/Budgeted hours
(UNDER)/OVER ABSORPTION = (Actual hours * Std. OAR/unit) – Actual Overheads
MARGINAL COSTING
SP – VC = Contribution – FC = Profit
Marginal costing profit
+/(-)
Increase/(decrease) in inventory level * STD. OAR/unit
Absorption Costing Profit
Process Costing
Cost/unit = (Material cost + Conversion Cost – Scrap of Normal loss)/Expected output
Equivalent units of O/P WIP: FIFO- % to complete; WAC – 100%
O/P+Input-C/S = Total Output
Units started and completed this period = INPUT – C/S
Physical distribution = (X’s units/ Total units)*Common costs
Sales value basis = (X’s Sales value @ Split off/ Total Sales Value @ Split off)*Common Costs
Alternative Costing Methods
Cost/cost driver = COST POOL$/No. of Cost drivers
TARGET COST = Estimated SP – Expected Profit
BUDGETING
Additive Model, S =Y –S , Total to 0
Multiplicative model, S = Y/T , total to 4
Layspeyre P.I. = (∑PnQ0)/(∑P0Q0) * 100
Layspeyre Q.I. = (∑P0Qn)/(∑P0Q0) * 100
Paasche P.I. = (∑PnQn)/(∑P0Qn) * 100
Paasche Q.I. = (∑PnQn)/(∑PnQ0) * 100
Fishers index = √ (Layspeyre * Paasche)
PRODUCTION BUDGET = SALES – C/S FG – O/P FG
MAT. USAGE BUDGET = PRODUCTION UNITS * STD. USAGE /UNIT
MAT. PURCHASE BUDGET = MAT. USAGE+ C/S MATERIALS – O/P MATERIALS
LABOUR BUDGET = PRODUCTION * STD HRS* STD. RATE
VALUE ADDED = Sales – Cost of Bought in material and services
Pay back period = Year before recovery +[(unrecovered cost/ cashflow during next year)*12]
S = P(1+r)n
P = S/(1+r)n
Effective annual Interest rate: (1+R) = (1+r)n
Perpetuity = 1/r
IRR = A+[a/(a-b)*(B-A)]*100%
VARIANCE ANALYSIS
MAT. PRICE = AQSP-AQAP
MAT. USAGE = SQSP – AQSP
LAB. RATE = AHSR – AHAR
LAB. EFFICIENCY = SHSR – AAH SR
IDLE TIME = IDLE HRS * SR
VOH EXPENDITURE = AAHSR – AAHAR
VOH EFFICIENCY = SHSR – AAHSR
FOH TOTAL VARIANCE = ABSORBED OH – ACTUAL OH
FOH EXPENDITURE = BUDGETED OH – ACTUAL OH
FOH VOLUME = BUDGETED OH – (ACTUAL PRODUCTION * STD.OAR/UNIT)
FOH EFFICIENCY = [(ACTUAL PN*STD HRS) – ACTUAL HRS]*STD OAR/HR
FOH CAPACITY = (BUDGETED HRS – ACTUAL HOURS)*STD OAR/HR
SALES PRICE = AQAP-AQSP
SALES VOLUME = (AQ-BQ)* STD. PROFIT OR STD. CONTRIBUTION
STD PROFIT FROM ACTUAL SALES = BUDGETED PROFIT – SALES VOLUME VARIANCE
STD COST OF ACTUAL SALES = BUDGETED PROFIT – SALES VARIANCES
PERFORMANCE MEASUREMENT
ROCE = PBIT/CAPITAL EMPLOYED *100%
ROI = PROFIT/INVESTMENT *100%
RETURN ON SALES OR PROFIT MARGIN = PROFIT/SALES REVENUE * 100%
ASSET TURNOVER = SALES REVENUE/CAPITAL EMPLOYED
COST TO SALES RATIO = COST/SALES REVENUE
CURRENT RATIO = CA/CL
QUICK RATIO = CA – INVENTORY/CL
RECIEVABLE DAYS = AVG. RECEIVABLES/CREDIT SALES *365
INVENTORY DAYS = AVG INVENTORY/COST OF SALES *365
PAYBALE DAYS = AVG. PAYABLES/CREDIT PURCHASES * 365
WORKING CAPITAL CYCLE = INVENTORY DAYS + RECIEVABLE DAYS – PAYABLE DAYS
GEARING RATIO = DEBT/(DEBT+EQUITY)
OPERATING GEARING = OPERATING PROFIT/CONTRIBUTION
INTERSET COVER = PBIT/INTEREST
EPS = PAT AND PREFERENCE DIVIDEND/NO OF ORDINARY SHARES
PE RATIO = PRICE PER SHARE/EPS
DIVIDEND COVER = EPS/DIVIDEND PER SHARE
CAPACITY RATIO = ACTUAL HRS/BUDGETED HRS* 100%
ACTIVITY RATIO = STD HRS/BUDGETED HRS *100%
EFFICIENCY RATIO = STD. HRS/ACTUAL HRS *100%