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    C OST A Ccounting F Ormulas &

    Uploaded by

    Mobashir Mahmood
    1. The document defines important cost accounting formulas and terminologies including prime cost, total production cost, conversion cost, manufacturing cost, cost of goods manufactured, goods available for sale, cost of goods sold, contribution margin, and income statement. 2. Key formulas include prime cost equals direct material plus direct labor, total production cost equals prime cost plus fixed overhead cost, and conversion cost equals direct labor plus fixed overhead cost. 3. The document also discusses calculating applied fixed overhead rates based on direct labor cost, material cost, and prime cost.

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    C OST A Ccounting F Ormulas &

    Uploaded by

    Mobashir Mahmood
    14 views4 pages
    1. The document defines important cost accounting formulas and terminologies including prime cost, total production cost, conversion cost, manufacturing cost, cost of goods manufactured, goods available for sale, cost of goods sold, contribution margin, and income statement. 2. Key formulas include prime cost equals direct material plus direct labor, total production cost equals prime cost plus fixed overhead cost, and conversion cost equals direct labor plus fixed overhead cost. 3. The document also discusses calculating applied fixed overhead rates based on direct labor cost, material cost, and prime cost.

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    1. The document defines important cost accounting formulas and terminologies including prime cost, total production cost, conversion cost, manufacturing cost, cost of goods manufactured, goods available for sale, cost of goods sold, contribution margin, and income statement. 2. Key formulas include prime cost equals direct material plus direct labor, total production cost equals prime cost plus fixed overhead cost, and conversion cost equals direct labor plus fixed overhead cost. 3. The document also discusses calculating applied fixed overhead rates based on direct labor cost, material cost, and prime cost.

    Copyright:

    © All Rights Reserved
    Download as RTF, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as rtf, pdf, or txt
    14 views4 pages

    C OST A Ccounting F Ormulas &

    Uploaded by

    Mobashir Mahmood
    1. The document defines important cost accounting formulas and terminologies including prime cost, total production cost, conversion cost, manufacturing cost, cost of goods manufactured, goods available for sale, cost of goods sold, contribution margin, and income statement. 2. Key formulas include prime cost equals direct material plus direct labor, total production cost equals prime cost plus fixed overhead cost, and conversion cost equals direct labor plus fixed overhead cost. 3. The document also discusses calculating applied fixed overhead rates based on direct labor cost, material cost, and prime cost.

    Copyright:

    © All Rights Reserved
    Download as RTF, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as rtf, pdf, or txt
    of 4

    C

    OST
    A
    CCOUNTING
    F
    ORMULAS
    &

    I
    MPORTANT
    T
    ERMINOLOGIES

    1.

    Prime Cost
    = Direct Material + Direct Labor2.

    Total Production Cost


    = Prime Cost + FOH Cost3.

    Conversion Cost
    = Direct Labor + FOH Cost4.

    Raw Material Consumed

    == Raw Material Opening + Material Purchases

    Material Closing5.

    Manufacturing Cost
    = Prime Cost + FOH Cost
    {Same as Sr. No.2}
    6.

    Cost Of Goods Manufactured


    == Manufacturing Cost + Opening WIP

    ClosingWIP7.

    Goods Available for Sale


    == Cost Of Goods Manufactured + Opening Finished Goods8.

    Cost of Goods Sold


    = Goods Available for Sale

    Closing Finished Goods9.

    Contribution Margin
    = Sales

    Variable Cost10.

    Income Statement
    = Gross Profit

    Operating Expenses11.

    Income Statement
    = (Sale-COGS)

    (Selling + Admin + MarketingExpenses)12.

    Applied FOH Rate


    13.

    FOH Rate
    = Total FOH Cost x 100 = Answer %
    {Based on Labor Cost}
    Labor Cost14.

    FOH Rate
    = Total FOH Cost x 100 = Answer %
    {Based on Material}
    Material Cost15.

    FOH Rate
    = Total FOH Cost x 100 = Answer %

    {Based on Prime Cost}


    Prime Cost

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