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Accounting I Formula
Formulas for accounting I
| Term | Formula |
|---|---|
| Working Capital | Current Assets - Current Liabilities |
| Current Ratio | Current Assets / Current Liabilities |
| Quick Ratio | Quick Assets / Current Liabilities |
| Quick Assets | Cash + Marketable Securities + Accounts Receivable |
| Predetermined Overhead Rate | Estimated Total Factory Overhead Costs / Estimated Activity Base |
| Applied Manufacturing Overhead Cost | Predetermined Factory Overhead Rate x Actual Activity Base for the Period |
| Over(Under) Applied Manufacturing Overhead Cost | Underapplied Overhead: Actual > Applied Overapplied Overhead: Actual < Applied |
| High-Low Method | Used to divide a mixed cost into its’ fixed and variable component for purposes of analysis. When cost-volume-profit analysis (defined below) is performed, all costs must be categorized as fixed or variable. |
| Contribution Margin | Sales – Variable Costs |
| Contribution Margin Ratio | ((Sales – Variable Costs) / Sales) |
| Breakeven Point | Fixed Costs / Contribution Margin per Unit |
| Target Profit | ((Fixed Costs + Target Profit) / Contribution Margin per Unit) |
| Margin Of Safety | Sales – Break-Even Sales |
| Margin Of Safety Ratio | Sales – Break-Even Sales)/ Sales |
| Sales Budget | Unit Sales x Sales Price Per Unit = Total Sales |
| Production Budget | Unit Sales + Desired Ending Inventory = Subtotal – Estimated Beginning Inventory = Total Units to be Produced |
| Direct Materials Purchase Budget | Total Units to Produce x Direct Materials Required per Finished Good Unit = Units of Direct Materials Needed + Desired Ending Inventory = subtotal – Estimated Beginning Inventory = Units of Direct Materials to be Purchased x Direct Materials Cost per Unit |
| Direct Labor Budget | Total Units to be Produced x Direct Labor Hours per Finished Goods Unit = Total Hours of Direct Labor Needed x Direct Labor Cost per Unit = Total Cost of Direct Labor |
| Cash Budget | Beginning Cash Balance + Cash Receipts = Cash Available – Cash Payments = Ending Cash Balance |
| Direct Materials Price Variance | Actual Quantity (Actual Price – Standard Price) |
| Direct Materials Quantity Variance | Standard Price (Actual Quantity – Standard Quantity) |
| Total Direct Materials Variance | Direct Materials Cost Variance + Direct Materials Quantity Variance |
| Direct Labor Rate Variance | Actual Hours (Actual Rate – Standard Rate) |
| Direct Labor Time Variance | Standard Rate (Actual Hours – Standard Hours) |
Created by:
katiehensley42
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