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What are the Direct Material Variances?
- Total Material Variance (TMV):
- (AQ * AP) - (SQ - SP)
- Material Price Variance (MPV):
- (AQ*AP) - (AQ*SP)
- Material Quantity Variance (MQV):
- (AQ*SP) - (SQ*SP)
What are the Direct Labour Variances?
- Total Labour Variance (TLV):
- (AH * AR) - (SH - SH)
- Labour Price Variance (LRV):
- (AH*AR) - (AH*SR)
- Labour Quantity Variance (LQV):
- (AH*SR) - (SH*SR)
What are the Variable Overhead Variances
- 1) Variable Overhead Rate per Hour:
- Variable Overhead/DL Hours
- Spending Variance:
- Incurred - (Direct Hours worked * VOH/Hour)
- Usage Variance:
- (Direct Hours worked * VOH/Hour) - (Produced * SR * VOH/Hour)
- Budget Variance:
- Spending + Usage
How to calculate total overhead variance?
Total Variable OH variance + Fixed OH spending Variance
How can we calculate Break-even?
- Fixed Costs/Contribution margin
- 1- (Variable cost/sales)
- In units:
- Break Even Point/Per Unit Selling Price
- FC/Per unit CM
How do we calculate Unit Sales to attain target profit?
(Fixed Cost + Target Profit)/Unit CM
How do we calculate Contribution Margin?
1 - VC in %
Sales - VC
How do we calculate Margin of Safety?
(Budgeted Sales - Break-Even sales)/Budgeted Sales
How does Incremental Analysis look like foo
- Total machine hours available
- Machine hours required for x
- Machine hours left
- Supply contract
- Balance remaining
- //used to top up 90% on tract
- Less: (10% * 250 * 4) for A20
- Balance remaining
- Number of MH per unit for A40
Number of additional A40
How does a cash disbursement budget look like?
How does one get variable costing income from absorption costing?
Net income + (number of units sold - number of units produced)
How does one get throughput costing income from variable costing?
Net income of absorption + (number of units sold - number of units produced * (DL + VMOH))
Depict Absorption cost.
Where COGS = (Fixed Manufacturing OH / produced) + Variable MOH (DM + DL + VOH)
Depict Throughput costing
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