CPA BEC CH 53 Cost acct'g Part 1
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What's the def of CC?
Sum of DL & MOH (V & F)! It represents the costs to convert raw mat'ls into finished products.
What's the cont margin ratio?
Total cont margin / total sales
What are prime costs?
DM & DL
Formula for composite units? (also called the BE point for mixed sales)
FC / Composite CMCCM is the weighted CM's added together.Note: A composite unit is based on da ex in da bk as the "package" made up of 1 unit of A, 3 units of B, & 4 units of C.
What's the formula for % markup on cost in cost-plus pricing?
% markup on cost = % markup on selling price / 100% - % markup on selling price
What's the dollar sales to achieve a desired profit formula?
(FC + desired NI) / Cont Marg Ratio
Formula for composite cont margin?
CCM = Sum(sales mix ratio for a product x cmr for the product)ex. 1/19 (50%) + 6/19 (25%) + 12/19 (33%)
What is composite BE?
When a company sells more than 1 product, a BE point can be determined for each product based on expected sales mix & the composite or combined cont marg!
What's the def of MOS?
MOS can be defined as the xs of budgeted (or actual) sales over the BE volume of sales. It states the amount by which sales can drop before losses begin to be incurred in an org.Total Sales - BE Sales = MOSMOS / Total Sales = MOS%
What are committed costs?
These represent fixed costs that arise from having PPE, & a functioning org! These costs remain even when the production volume is zero! Included is depr & LT lease pymts.
What's in the WIP inventory acct?
Beg Bal + RM, Labor, OH used = Avail to finish - Good Finished ( to FG's) = ending balance
What are product costs?
They are inventoriable. They are DM, DL, VOH & FOH. Pretty much everything!
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