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Questions and Answers
What is the formula for calculating the price per hour (full cost per hour)?
What is the formula for calculating the price per hour (full cost per hour)?
Price per hour = Full cost per hour
In the formula, per unit demand hours x 1100% + markup percentage = new life cycle cost new revenue + new sale price, what is the missing term represented by ______?
In the formula, per unit demand hours x 1100% + markup percentage = new life cycle cost new revenue + new sale price, what is the missing term represented by ______?
Mark up ratio
What is the formula for calculating total manufacturing overhead?
What is the formula for calculating total manufacturing overhead?
Total manufacturing overhead = Fixed manufacturing overhead + Variable manufacturing overhead
How is cost of goods sold calculated?
How is cost of goods sold calculated?
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Which of the following is included in the calculation of target operating income?
Which of the following is included in the calculation of target operating income?
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The formula for markup per unit is _____ per unit = full cost per unit
The formula for markup per unit is _____ per unit = full cost per unit
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Study Notes
Cost and Management Accounting
- Materials waiting to be used in the manufacturing process are considered direct materials stock.
Direct Materials Costs
- Direct materials costs are calculated by adding purchases and subtracting used materials from the ending stock.
Manufacturing Overhead
- Fixed manufacturing overhead includes costs that remain the same even if the production level changes.
- Variable manufacturing overhead includes costs that vary with the production level.
- Total overhead costs are the sum of fixed and variable overhead costs.
Direct Manufacturing Labour Costs
- Direct manufacturing labour costs are calculated by adding the costs of direct materials used and manufacturing overhead.
Work in Process Inventory
- Work in process inventory is calculated by adding the beginning work in process inventory to the manufacturing costs incurred and subtracting the cost of goods manufactured.
Finished Goods Inventory
- Finished goods inventory is calculated by adding the beginning finished goods inventory to the cost of goods manufactured and subtracting the cost of goods sold.
Income Statement and Supporting Schedule
- To find the income statement and supporting schedule, calculate the cost of goods sold, cost of goods manufactured, and manufacturing costs incurred.
Cost of Goods Sold
- Cost of goods sold is calculated by adding the beginning finished goods inventory to the cost of goods manufactured and subtracting the ending finished goods inventory.
Cost of Goods Manufactured
- Cost of goods manufactured is calculated by adding the beginning work in process inventory to the manufacturing costs incurred and subtracting the ending work in process inventory.
Cost of Goods Purchased
- Cost of goods purchased is calculated by adding freight in and purchase discounts to the cost of goods purchased.
Alternative Cost
- Alternative cost is calculated by dividing the budgeted fixed manufacturing overhead by the denominator level.
Contribution Margin
- Contribution margin is calculated by subtracting the variable cost per unit from the selling price.
Break-Even Analysis
- Break-even point is calculated by dividing the fixed costs by the contribution margin per unit.
- Margin of safety is calculated by subtracting the break-even revenue from the budgeted revenue.
Breakeven Points in Bundles
- Breakeven points in bundles are calculated by multiplying the ratio of sales mix by the total units sold.
Target Operating Income
- Target operating income is calculated by multiplying the target return on investment by the invested capital.
Markup on Full Costs
- Markup on full costs is calculated by dividing the markup percentage by the full cost per unit.
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Description
Test your knowledge of cost and management accounting, including direct materials, manufacturing processes, and more.
