AAT - Level 3 Formulas

Description

Level 3 Management Accounting Costing
Emma Cattermole
Flashcards by Emma Cattermole, updated more than 1 year ago
Emma Cattermole
Created by Emma Cattermole almost 8 years ago
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Resource summary

Question Answer
Variable Cost per unit (Highest Cost - Lowest Cost)/(Highest Activity - Lowest Activity)
Hi Low Method Total cost = Fixed cost - (variable cost x activity)
Cost per unit Total Cost/Activity
Flexed Budget (Original budgeted activity/Original budgeted cost) x new activity
Revenue units sold x sales price
Profit Revenue - cost
Economic Order Quantity √2 x (cost of ordering x annual demand)/cost of holding one unit for one year
Reorder Level maximum demand x maximum lead time
Reorder Level with buffer (Maximum demand x maximum lead time) + buffer
Minimum Inventory Level Reorder level - (average demand x average lead time)
Maximum Inventory level Reorder Level + EOQ - (minimum demand x minimum lead time)
Overtime Premium (Basic pay x multiplier) - Basic pay
Direct Costs Prime costs
Overhead Absorption Rate Budgeted Costs/Budgeted activity
Marginal Costing Only uses variable costs
Unit Contribution Sales - variable cost
Cost c/f to next period Inventory x OAR
Difference in profit absorption and marginal costing Inventory movement x OAR
SIAM Stock increasing mean absorption will have more profit
Contribution Revenue - variable cost
Breakeven point in Units fixed costs/contribution
Breakeven in Revenue Breakeven point in units x selling price
Target Units (Fixed costs + target profit)/unit contribution
Margin of safety in units Budgeted or actual sales - breakeven sales volumes
Margin of safety as a % (Margin of safety in units/budgeted actual sales) x 100
Profit to Volume/ Contribution to sales ratio in units (Unit contribution/ unit price) x 100
Profit to Volume/ Contribution to sales ratio in % (Total Contribution/Total Revenue) x100
Target Revenue (Fixed costs + Target Profits)/ contribution to sales ratio
Limiting Factors Step 1 Amount needed = (cost of materials/price per unit) x demand
Limiting Factors Step 2 Calculate unit contribution for each product (Revenue - variable cost)
Limiting Factors Step 3 Contribution/ Limiting Factor
Limiting Factors Step 4 Rank the Products by amount of contribution the have make the one with the most contribution first
Limiting Factors Step 5 Production Schedule Cap of materials show how much you can make of each product before you run out of material in order of rankings
Payback Period Internal Rate of Return a% + (npv a/(npv a – npv b)) x (b% - a%)
NPV Net Present Value
Process Costing Step 1 Unit Calculation compare what was put in to the process to what came out (in whole pounds)
Process Costing Step 2 Update the process account with available information Materials in on the left Materials out on the right MUST BALANCE
Process Costing Step 3 Calculate the unit cost of output (Cost of input - normal loss value)/ (input units - normal loss units) in pound and pence
Process Costing Step 4 Complete the process account to include normal loss coming out of the process
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