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  • ch2 Managerial

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    tam tam
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    The document discusses cost accounting concepts including variable costs, fixed costs, prime costs, conversion costs, and period costs. It provides examples such as calculating variable cost per unit based on a range of units. It also presents a cost formula of Total Cost = Fixed Cost + Variable Cost per Unit * Number of Units. Manufacturing costs include direct material, direct labor, and manufacturing overhead. Prime cost is the sum of direct material and direct labor. Conversion cost is direct labor plus manufacturing overhead. Period costs are non-manufacturing costs like selling and administrative expenses.

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    ch2 managerial

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    The document discusses cost accounting concepts including variable costs, fixed costs, prime costs, conversion costs, and period costs. It provides examples such as calculating variable cost per unit based on a range of units. It also presents a cost formula of Total Cost = Fixed Cost + Variable Cost per Unit * Number of Units. Manufacturing costs include direct material, direct labor, and manufacturing overhead. Prime cost is the sum of direct material and direct labor. Conversion cost is direct labor plus manufacturing overhead. Period costs are non-manufacturing costs like selling and administrative expenses.

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    Download as DOCX, PDF, TXT or read online from Scribd
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    10 views3 pages

    ch2 Managerial

    Uploaded by

    tam tam
    The document discusses cost accounting concepts including variable costs, fixed costs, prime costs, conversion costs, and period costs. It provides examples such as calculating variable cost per unit based on a range of units. It also presents a cost formula of Total Cost = Fixed Cost + Variable Cost per Unit * Number of Units. Manufacturing costs include direct material, direct labor, and manufacturing overhead. Prime cost is the sum of direct material and direct labor. Conversion cost is direct labor plus manufacturing overhead. Period costs are non-manufacturing costs like selling and administrative expenses.

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    © All Rights Reserved
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    of 3

    Variable cost per unit = High cost – Low cost

    High units – low units

    Variable cost per unit = 29000 - 17000 = 12000 = 3 $ per unit


    7000 – 3000 4000

    Variable Cost = variable cost per unit X High units

    Variable cost = 3 X 7000 = 21000


    Fixed Cost = High cost – variable cost

    Fixed cost = 29000 – 21000 = 8000

    Cost formula

    Y = a + bx
    Y = Total cost
    a=fixed cost
    b= variable cost per unit
    x = the number of units

    Y = 8000 + 3 X

    2-
    Y = 8000 + (3X4600) = 21,800

    Prime cost = Direct material + Direct labor

    DM = 50
    DL= 30
    Prime cost = 50 + 30 = 80

    Table ‫الطاولة الخشب‬

    ‫ االخشاب والمسامير والمادة االصقة‬Direct material

    ‫ النجار اللي صنع الطاوله بايده‬Direct labor


    Manufacturing overhead
    ‫مثل‬

    Supervisior’s salary

    Security staff in the factory

    Grease , oil …

    Product cost ) ‫= تكلفة المنتج (الطاولة‬

    Direct material + Direct labor + Minufacturing overhead cost

    Conversion Cost = Direct labor + Manufacturing overhead indirect

    DL = 200
    Factory rent = 150

    Conversion cost = 200 + 150 = 350

    Nonmanufacturing Costs is period cost

    Period cost includes : 1- Selling cost 2- Administrative cost

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