CA INTER

COST AND MANAGEMENT ACCOUNTING

FORMULA SHEET
Material Cost Employee Cost Overheads: Absorption
Costing Method
Re-order Stock Level (ROL) Wage Payment methods
ROL = Max. Con. x Max. Lead time Overheads Absorption Methods
or Straight Time Rate System
= Min. Stock + (Avg Consumption. x = Time Worked x Rate for the time % of Direct Material
Avg Lead time) Total Production Overheads
=
Straight Piece Rate System Budgeted Direct Material Cost
Economic Order Quantity (EOQ) = No. of units x Rate per unit
EOQ = �
2 AO % of Prime Cost
C Halsey Premium Plan Total Production Overheads
= Time Taken x Time rate =
A = Annual Requirement Prime Cost
O = Cost per order + (50% of time saved x time rate)
C = Carrying cost p.u. p.a. % of Direct Labour Cost
Rowan Premium Plan Total Production Overheads
= Time Taken x Time rate =
Minimum Stock Level Direct Labour Cost
= ROL – (Avg Con. x Avg. Lt) Time Saved
+ x Time taken x Rate
Time Allowed Labour Hour Rate
Maximum Stock Level Total Production Overheads
=
= ROL + ROQ – (Min Consumption x Efficiency Rating Direct Labour Hour
Min Lead time)
Efficiency in % Rate per unit of output
Average Inventory Level Time allowed as per stantard Amount of Overheads
= x 100 =
1 Time Taken Number of units
= Min. stock + ROL
2
(or) Employee Productivity Types of Overhead Rates
1 Standard time for doing actual work
= (Max. Stock + Min. Stock) = Normal OH Rate
2 Actual time taken
Actual amount of Overheads
=
Danger Level Employee Turnover Actual base
= Avg Consumption x Lead time for
emergency Replacement Method Pre-determined Rate
No. of Employees Replaced Budgeted amount of Overheads
Where, Lt = lead time or Re-order = x 100
=
Budgeted base
period Average no. of employees

Inventory Turnover Ratio Separation Method Blanked Rate

Cost of Materials Consumed No. of Employees Separated Total Overheads for the factory
=
= = x 100 Total units of base for the factory
Cost of Average Stock held Average no. of employees
1
Avg stock = (Opening + Closing) Departmental OH Rate
2 Flux Method OH of department or cost centre
No.of Separations+Accessions =
Average no. of days of Inventory
= x100 Corresponding base
Average no.of employees
holding
365 days / 12 months Equivalent Employee TO Rate Supplementary Rate
= No. of Employees Replaced Under / Over absorbed Overheads
Inventory Turnover Ratio = x 365 =
Units produced
Average no. of employees

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Activity Based Costing
Labour Cost Variance Break-even point
Activity cost driver rate = (𝑆𝑆𝑆𝑆 𝑥𝑥 𝑆𝑆𝑆𝑆) – (𝐴𝐴𝐴𝐴 𝑥𝑥 𝐴𝐴𝐴𝐴)
Total cost of activity Fixed cost
= 𝐢𝐢𝐢𝐢 𝐮𝐮𝐮𝐮𝐮𝐮𝐮𝐮𝐮𝐮 =
Activity driver Labour Rate Variance Contribution per unit
= (𝑆𝑆𝑆𝑆 – 𝐴𝐴𝐴𝐴) 𝑥𝑥 𝐴𝐴𝐴𝐴 Fixed cost
𝐢𝐢𝐢𝐢 𝐯𝐯𝐯𝐯𝐯𝐯𝐯𝐯𝐯𝐯 =
P/V Ratio
Labour Efficiency Variance
Unit & Batch Costing = (𝑆𝑆𝑆𝑆 − 𝐴𝐴𝐴𝐴) 𝑥𝑥 𝑆𝑆𝑆𝑆
Cash Break-even point in units
Cost per unit Cash Fixed cost
Total cost of Production Labour Mix Variance =
= Contribution per unit
= (RSH – AH) x SR
No. of units produced Required Sales
Fixed cost + Desired pro�it
Labour Yield Variance =
Economic Batch Quantity P/V Ratio
= (SH – RSH) x SR
2DS
EQB = � Margin of Safety
C Idle Time Variance
= 𝑆𝑆𝑆𝑆 𝑥𝑥 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻 = Actual Sales – BE point
D = Annual demand for product (or)
S = Setting up cost per batch Pro�it
C = Carrying cost per unit Variable OH Cost Variance =
= Std OH for actual prod. P/V Ratio
– Actual OH
Process & Operation Margin of Safety ratio
Costing V OH Expenditure Variance =
Total sales − BE sales
= (SR – AR) x AH Total sales
Value of units transferred
TC − RV of normal loss V OH Efficiency Variance
=
input units − normal loss units = (SH – AH) x SR Budgets & Budgetary
x units transferred
Controls
Fixed OH Cost Variance
Value of Normal loss = 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 − 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 Efficiency Ratio
= Scrap RV – cost to sales Standard hours
Fixed OH Expenditure Variance = x 100
Value of Abnormal loss Actual hours
TC − RV of normal loss = 𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵 − 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴
= Activity Ratio
input units − normal loss units
Fixed OH Volume Variance Standard hours
𝑥𝑥 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 = x 100
= 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 – 𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵 Budgeted hours
where, TC = total cost
RV = realizable value Fixed OH Efficiency Variance Calendar Ratio
= 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 − 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 Available working days
= x 100
Equivalent completed units Budgeted working days
= Actual units in process Fixed OH Capacity Variance
x % of work completed = 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 − 𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵 Standard Capacity Usage ratio
Budgeted hrs.
Fixed OH Calendar Variance = x 100
Standard Costing Max. hrs. in budgeted period
= 𝑆𝑆𝑆𝑆 𝑥𝑥 (𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 –
Material Cost Variance 𝑆𝑆𝑆𝑆𝑆𝑆 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑)
Actual Capacity Usage ratio
= (SQ x SP) – (AQ x AP) Actual hrs worked
= x 100
Max. working hrs in a period
Material Price Variance Marginal Costing
= (𝑆𝑆𝑆𝑆 – 𝐴𝐴𝐴𝐴) 𝑥𝑥 𝐴𝐴𝐴𝐴 Actual Usage of Budgeted
Capacity ratio
Material Usage Variance Contribution Actual working hours
= (𝑆𝑆𝑆𝑆 – 𝐴𝐴𝐴𝐴) 𝑥𝑥 𝑆𝑆𝑆𝑆 = 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 – 𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 = x 100
Budgeted hours
(Or)
Material Mix Variance = 𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 + 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
= (𝑅𝑅𝑅𝑅𝑅𝑅 – 𝐴𝐴𝐴𝐴) 𝑥𝑥 𝑆𝑆𝑆𝑆
Contribution
𝐏𝐏/𝐕𝐕 𝐑𝐑𝐑𝐑𝐑𝐑𝐑𝐑𝐑𝐑 =
Material Yield Variance Sales
= (SQ – RSQ) x SP