LEARNING FREE ONLINE ACCOUNTING
(http://www.basiccollegeaccounting.com/)
“Dedicated to helping Students & Teachers”
DICTIONARY OF FORMULA
FOR
COST ACCOUNTING
AND
MANAGERIAL ACCOUNTING
E-BOOK
__________________________________________________________________
For easy reference/revision append below a snapshot or
summary of the common formula used in costing and
managerial accounting:
BREAKEVEN ANALYSIS FORMULAS
Breakeven point (quantity)
Fixed cost
Contribution per unit
Breakeven point-(value)
Sales value x fixed cost
Total contribution
Breakeven point- ( value)
Fixed cost
Contribution sales ratio
Contribution
Sales minus marginal(variable) cost
Contribution
Fixed cost plus profit
Contribution sales ratio
Margin of safety
Margin of safety
Profit
Contribution
Sales
Sales
level
minus
( quantity)
Profit
Contribution sales ratio
Contribution minus fixed cost
breakeven
(Page 1)
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point
LEARNING FREE ONLINE ACCOUNTING
(http://www.basiccollegeaccounting.com/)
“Dedicated to helping Students & Teachers”
DICTIONARY OF FORMULA
FOR
COST ACCOUNTING
AND
MANAGERIAL ACCOUNTING
E-BOOK
__________________________________________________________________
OVERHEAD COSTING FORMULAS
Cost unit rate
Direct material cost %
rate
Direct labor cost % rate
Direct labor hour rate
Predetermined absorption
rate
Prime cost % rate
Machine hour rate
Based on
Production/Output
Administration Costs
Selling & Marketing Costs
Budgeted overhead
Budgeted output
Budgeted overhead x 100 %
Budgeted direct material costs
Budgeted overhead x 100 %
Budgeted direct labor cost
Budgeted overhead
Budgeted direct labor hours
Estimated or budgeted overhead for the
period
Estimated or budgeted units of base for
the period
Budgeted overhead X 100
Budgeted Prime cost
Budgeted overhead
Budgeted machine hours
Budgeted overhead
Budgeted units produced
Non-production overheads
Budgeted admin cost
Budgeted production cost
Or
Budgeted admin cost
Budgeted conversion cost
Budgeted selling & marketing cost
Budgeted sales value
Or
Budgeted selling & marketing cost
Budgeted production cost
(Page 2)
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LEARNING FREE ONLINE ACCOUNTING
(http://www.basiccollegeaccounting.com/)
“Dedicated to helping Students & Teachers”
DICTIONARY OF FORMULA
FOR
COST ACCOUNTING
AND
MANAGERIAL ACCOUNTING
E-BOOK
__________________________________________________________________
MATERIALS COSTING FORMULAS
Economic Order
Quantity(EOQ)
Square of 2ab/c
Minimum level
Re-order level œ (Average usage x Average reorder period)
Maximum level
Re-order level + Quantity ordered-(Minimum
usage x Minimum re-order period)
Re-order level
Maximum usage x Maximum re-order period
Cost Of materials stock consumed
Stock Turnover
Average stock of materials
COSTING FOR LABOR FORMULAS
No of employees left and replaced
Labor Turnover
rate
Average number of employee
Halsey scheme
² x Time saved x W age rate per hour
(Page 3)
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LEARNING FREE ONLINE ACCOUNTING
(http://www.basiccollegeaccounting.com/)
“Dedicated to helping Students & Teachers”
DICTIONARY OF FORMULA
FOR
COST ACCOUNTING
AND
MANAGERIAL ACCOUNTING
E-BOOK
__________________________________________________________________
CONTRACT COSTING FORMULAS
Cost of work certified
Cost of all work to date œ Cost of work
not certified
Profit to be taken on a
contract
2/3 ( Value of work certified-Cost of
W ork certified) x Cash received/Value of
work certified
Total profit on the contract to date œ
Profit taken into account.
Profit in suspense
PROCESS COSTING FORMULAS
Abnormal gain/(loss)
Actual loss œ normal loss
Total equivalent
production
Completed units + Equivalent units in
W ork in Progress (W IP)
(Page 4)
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LEARNING FREE ONLINE ACCOUNTING
(http://www.basiccollegeaccounting.com/)
“Dedicated to helping Students & Teachers”
DICTIONARY OF FORMULA
FOR
COST ACCOUNTING
AND
MANAGERIAL ACCOUNTING
E-BOOK
__________________________________________________________________
STANDARD COSTING & VARIANCE ANALYSIS
FORMULAS
MATERIALS:
(Actual price-Standard price) x Actual quantity
Materials PRICE variance
( use purchase quantity if it is given)
Material USAGE variance
(Actual Quantity Used-Standard Quantity of Actual
Production) x Standard Price
Material COST Variance
Material Price Variance + Material Usage Variance
Material MIX variance
(Actual Mix œ Standard Mix) x Standard Price
Materials YIELD variance
(Actual Output-Standard Output) x Standard Cost
of Output
Material USAGE variance
Material Mix Variance + Materials Yield Variance
LABOR:
(Page 5)
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LEARNING FREE ONLINE ACCOUNTING
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“Dedicated to helping Students & Teachers”
DICTIONARY OF FORMULA
FOR
COST ACCOUNTING
AND
MANAGERIAL ACCOUNTING
E-BOOK
__________________________________________________________________
Labor RATE variance
(Actual Rate-Standard Rate) x Actual Hours Paid
Labor EFFICIENCY
variance
(Actual Hours worked- Standard ours of Actual
Production) x Standard Rate
Labor IDLE TIME variance
Idle time x Standard Rate
Labour COST variance
Labor Rate variance + Labor Efficiency variance +
Idle Time variance
VARIABLE OVERHEAD:
EXPENDITURE variance
(Actual Rate-Standard Rate) x Actual Hours
W orked
EFFICIENCY variance
(Actual Hours worked-Standard Hours of actual
production) x Standard Rate
COST variance
Expenditure variance + Efficiency variance
FIXED OVERHEAD:
EXPENDITURE variance
(Actual Expenditure-Budgeted Expenditure)
(Page 6)
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LEARNING FREE ONLINE ACCOUNTING
(http://www.basiccollegeaccounting.com/)
“Dedicated to helping Students & Teachers”
DICTIONARY OF FORMULA
FOR
COST ACCOUNTING
AND
MANAGERIAL ACCOUNTING
E-BOOK
__________________________________________________________________
VOLUME variance
(Budgeted
Hours-Standard
Production) x Standard Rate
COST variance
(Expenditure variance + Volume variance)
CAPACITY variance
(Budgeted Hours-Actual Hours) x Standard Rate
EFFICIENCY
(PRODUCTIVITY)
variance
VOLUME variance
(Actual
Hours-Standard
Production) x Standard Rate
Hours
Hours
(Capacity Variance + Efficiency Variance)
SALES :
PRICE variance
(Actual Price-Standard Price) x Actual Quantity
VOLUME variance
(a) Sales Value method:
(b) Sales Margin method:
(Actual Quantity-Budgeted Quantity) x Standard
Selling Price
(Actual Quantity-Budgeted Quantity) x Standard
Contribution
(Page 7)
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of
of
Actual
Actual
LEARNING FREE ONLINE ACCOUNTING
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“Dedicated to helping Students & Teachers”
DICTIONARY OF FORMULA
FOR
COST ACCOUNTING
AND
MANAGERIAL ACCOUNTING
E-BOOK
__________________________________________________________________
STANDARD COSTING & VARIANCE ANALYSIS FORMULAS UNDER THE
STANDARD MARGINAL COSTING TECHNIQUES:
(a)No volume variance under fixed overhead
(b)Sales margin volume variance= (Actual Quantity-Budgeted Quantity) X
Standard Contribution
(Page 8)
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