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Accounting Formula Cheat Sheet

Prime Cost = Direct material costs + Direct labour costs

Conversion Cost = Direct labour + Manufacturing overhead costs
Product costs = Cost of materials (if applicable) + Direct labour + Overheads
Overhead cost = Plant wide rate x Units of the selected allocation base used by each product
!"#$ &'($)' "*')+',-#
Overhead rate = !"#$ &'($)' -.)'&$ /,0"1) +"1)# ") 2,&+.(' +"1)#
3#$.2,$'- ("(42,(15,&$1).(6 "*')+',-
Non-manufacturing overhead absorption rate = 3#$.2,$'- 2,(15,&$1).(6 &"#$

7(81$ &"#$
Cost per unit of output = 398'&$'- "1$81$

7(81$ &"#$ 4:&),8 *,/1' "5 (")2,/ /"##

Cost per unit of output (with scrap value) =
398'&$'- "1$81$

!1))'($ 8')."- &"#$#

Average cost per unit = !1))'($ $"$,/ ';1.*,/'($ 1(.$#

Contribution Margin = Sale Revenue – Variable Costs

<.9'- !"#$#
Break-even points in units = !"($).01$."( 8') 1(.$

<.9'- !"#$#=>,)6'$ 8)"5.$

Units sold for the target profit = !"($).01$."( 8') 1(.$

Total required revenue = Fixed Costs + Variable Costs + Target Profit

!"($).01$."(
Profit-Volume ratio/ Contribution Margin ratio = :,/'#

Profit = (Sales revenue x PV ratio) – Fixed Costs

<.9'- !"#$#
Break-even Sales Revenue (where profit = 0) =
?@ ),$."
398'&$'- :,/'#4A)',B '*'( :,/'#
Percentage Margin of Safety = 398'&$'- :,/'#

>"$,/ <.9'- !"#$#

Break-even number of batches = !"($).01$."( 2,)6.( 8') 0,$&+

!"($).01$."( C,)6.(
Degree of operating leverage = ?)"5.$

:8'&.5.& &"#$ -).*') ,2"1($ 8)"*.-'-

Cost assignment = >"$,/ &"#$ -).*')
* Cost pool

Difference in Operating Profit (Absorption versus Marginal Costing) = Change in Inventory * Fixed Manufacturing Cost
per Unit
If you feel like a term is missing in the glossary, it is most likely defined within the previously given formula.
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The formulas we selected are the most important in our view (not all of them)