Page 1 - Equations

Flashcards covering key cost accounting terms, formulas, and methods from the provided lecture notes.

prime Cost

$$\text{Direct Materials} + \text{Direct Labor} + \text{Direct Expenses}$$

Marginal Cost

$$\text{Prime Cost} + \text{Variable costs}$$

Absorption cost

$$\text{Marginal cost} + \text{fixed production overheads}$$

High - Low Process

1. find highest and lowest activity

2. find variable = change in cost / change in activity

3. Find fixed cost at either highest or lowest activity

Total Cost = Fixed? + ( variable (2) x units)

4. Find total cost

Total cost? = Fixed (3) + (variable (2) x units)

Contribution

$$\text{Sales price} - \text{variable costs}$$

Batch costing

$$\text{Cost per unit} = \frac{\text{total batch cost}}{\text{nr units in batch}}$$