COST ACCOUNTING FORMULAS & IMPORTAN TERMINOLOGIES

1.Prime Cost= Direct Material + Direct Labor

2.Total Production Cost= Prime Cost + FOH Cost
3.Conversion Cost= Direct Labor + FOH Cost
4.Raw Material Consumed== Raw Material Opening + Material Purchases Material
Closing
5.Manufacturing Cost= Prime Cost + FOH Cost{Same as Sr. No.2}
6.Cost Of Goods Manufactured== Manufacturing Cost + Opening WIP ClosingWIP
7.Goods Available for Sale== Cost Of Goods Manufactured + Opening Finished Goods
8.Cost of Goods Sold= Goods Available for Sale Closing Finished Goods
9.Contribution Margin= Sales Variable Cost
10.Income Statement= Gross Profit Operating Expenses
11.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 Cost
14.FOH Rate= Total FOH Cost x 100 = Answer %{Based on Material}Material Cost
15.FOH Rate= Total FOH Cost x 100 = Answer %{Based on Prime Cost}Prime Cost
16.FOH Rate= Budgeted FOH Cost = Answer Rupee{Based onLabor Hours}
17.FOH Rate= Budgeted FOH Cost = Ans Rupees{Based on Machine Hours}
18.Per Unit Cost= Cost of Goods ManufacturedNo. of Units Produced19.
Re-Order Period= Lead Time
20.EOQ= Re-Order Quantity
21.Re-Order Level= (Max Consumption) x (Max Lead Time)
22.Max Stock Level== Re-Order Level (Min Consumption) x (Min Lead Time) + EOQ
23.Min Stock Level= Re-Order Level (Avg Consumption) x (Avg LeadTime)
24.Danger Stock Level= (Avg Consumption) x (Emergency Lead Time)
25.Average Stock Level= Min Stock Level + Max Stock Level2
26.Average Stock Level= Min Stock Level + Re-Order Quantity2
27.Average Stock Level= Min Stock Level + EOQ2
28.EOQ= 2 (Annual Units Consumption) x (Cost per Order)(Cost per unit of Material) x
(Carrying Cost Percentage)
29.Safety Stock= (Annual Demand) x (Max Lead Time Min Lead Time)365 x (Avg Lead
Time
30.Inventory Turnover Ratio= Material Consumed = Answer TimesAvg Inventory
31.Inventory Holding Period= No. of days in year = 365 Inventory Turnover Ratio
InventoryTurnover
RatioLabor
Premium Bonus Plans
32.Halsey Bonus Plan= (Time Allowed Time Saved) x (Rate per Labor Hour)2
33.Halsey-Weir Premium Bonus Plan== (Time Allowed Time Saved) x (Rate per
Labor Hour)3
34.Rowan Premium Plan
Step-I
Bonus Rate = Time Saved x 100 = Answer %Time Allowed
Step-II
Bonus Pay = (Basic Pay) x (Bonus Rate %) = Answer Rupees
Step-III
Now Total Pay = Basic Pay + Bonus Pay
Piece Rate System
35.Taylor's Differential Piece Rate Plan
If Efficiency > Standard then 120 % of Normal Piece Rate
= (Units Produced)x(Normal Piece Rate) + (1.20)x(Normal Piece Rate)
If Efficiency < Standard then 80 % of Normal Piece Rate
= (Units Produced)x(Normal Piece Rate) + (0.80)x(Normal Piece Rate)30.
Merrick's Differential Piece Rate Plan