Managerial Accounting Formulas PDF

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Summary

Computation of Formulas to assist with UFC1 practice questions...

Description

UFC1 Formula Tip Sheet*

*This list is based on the key concepts for this course. However, the formula sheet on the assessment will not include all of these formulas. You should know the concepts behind these formulas and not just memorize the formulas. Use this tip sheet as a study guide as your work through the course material.

Note that the following formulas are provided on-screen with your assessment: Contribution Margin per Unit (CMU) CMU = Sales Price per Unit - Variable Cost per Unit Contribution Margin Ratio (CMR) CMR = CMU / Sales Price Per Unit

Contribution Margin (C=P-V)

Break-Even Point in Units (BEP Units) BEP Units = Fixed Costs / CMU

P = Unit Revenue

Break-Even Point in Dollars (BEP $) BEP $ = Fixed Costs / CMR

Unit Margin = Unit Revenue – Unit Variable Cost

C = Unit Margin

V = Unit Variable Cost

Direct Materials Variance Price Variance = (Actual Quantity x Actual Price) - (Actual Quantity x Standard Price) Quantity Variance = (Actual Quantity x Standard Price) - (Standard Quantity x Standard Price) Cost Variance = Price Variance + or – Quantity Variance Direct Labor Variance Price Variance = (Actual Hours x Actual Rate) - (Actual Hours x Standard Rate) Quantity Variance = (Actual Hours x Standard Rate) - (Standard Hours x Standard Rate) Labor Variance = Price Variance + or – Quantity Variance Variable Overhead Variance Spending Variance = (Actual Hours x Actual Variable Overhead Rate) - (Actual Hours x Standard Variable Overhead Rate) Efficiency Variance = (Actual Hours x Standard Variable Overhead Rate) - (Standard Hours x Standard Variable Overhead Rate) Variable Overhead Variance = Spending Variance + or - Efficiency Variance Total Overhead Variance (TOV)

Overhead Rate based on Direct Labor Hours

TOV = Actual Overhead – Overhead Applied

Overhead Cost (Billable Hours) / Direct Labor Hours

The following formulas are NOT PROVIDED on-screen with your objective

assessment, but are recommended that you know prior to testing: Direct Materials Raw materials inventory, beginning + Raw material purchases = Raw materials available - Raw materials inventory, ending = Direct Materials Used Total Manufacturing Costs Direct Materials + Direct Labor + Manufacturing Overhead = Total Manufacturing Costs

Flexible Budget Total Manufacturing Cost Variable Cost per Unit x Actual Production Volume Cost of Goods Manufactured Work in process, beginning + Total Manufacturing Costs = Total cost of work in process - Work in process, ending_____ = Cost of Goods Manufactured Cost of Goods Manufactured (COGM) short formula: Beginning Work in Process (WIP) inventory + Total Manufacturing Costs – Ending WIP inventory

Weighted Average Cost WAC) Formula (Beginning Work in Process Cost + Cost added this period) = Total Costs/ Total Equivalent units = Cost per Equivalent Units Cost of Goods Sold Finished goods, beginning + Cost of goods manufactured = Goods available for sale - Finished goods, ending______

Adjusted Cost of Goods Sold (Beginning Inventory (at beginning of year) + Purchases and Other Costs) – Ending Inventory

Gross Profit Sales Revenue - Cost of Goods Sold = Gross Profit

Predetermined Overhead Rate (POR) Estimated Overhead Costs / Estimated Activity Base Overhead Applied POR x Actual Amount of the Activity Base for the period

Adjusting Cost of Goods Sold COGS - overapplied overhead COGS + underapplied overhead Weighted Average Equivalent Units of Production (EUP) Units Completed and Transferred Out + EUP in Ending WIP Inventory Note: materials and conversion costs are calculated separately Cost per EUP (Costs in Beginning WIP Inventory + Costs Added During the Period) / EUP Cost Pool Activity Rate Pool Overhead Costs / Number of Activities (also known as total activity base or drive quantity)

Total Cost Equation Total Cost = Fixed Costs + Variable Cost* *you may have to compute the variable costs (variable costs per unit x number of units)

Contribution Format Income Statement Sales Revenue - Variable Costs______ = Contribution Margin - Fixed Costs_________ = Income/Loss Differential Costs Current Cost to Make – Current Cost to Buy Sell As Is or Process Further Revenue from Item Processed Further - Revenue from Item Sold As Is________ = Incremental Revenue - Cost to Process the Item Further______ = Incremental Profit or Loss (if the number is positive, you have a profit and should process further)

Retain or Replace an Item Sales Proceeds of the Current/Old Item (might be called Trade-In Value, Cash Value, or Salvage Value) + Operating Savings from the New Item (over the entire useful life of the new item) - Purchase Price of the New Item = Net Advantage or Disadvantage to Replacing the Item (A positive number indicates there is an advantage to replacing the current item)

Eliminating a Segment or Product** Sales Revenue – Eliminated (or Avoidable) Costs = Net Effect on Total Company Income **an alternative method is shown in the cohorts that you might find more useful

Merchandise Inventory to be Purchased*** Budgeted Sales/Units/Cost of Goods Sold + Budgeted Ending Inventory - Budgeted Beginning Inventory___ = Inventory to be Purchased ***could use sales dollars, units or cost of goods sold. The calculation is the same in all cases....