Stuff

Marginal Costing = The cost of making one more unit

Work out contribution Per Unit = selling price – variable costs (prime cost = direct labour, direct materials, direct expenses)

Absorption Costing = Absorbs the total costs of the whole business amongst all of the cost units.

Prime cost + overheads = absorption cost.

Work out value as a whole then divide the total cost by number of units.

Activity Based Costing (ABC) = Charges overheads to output on the basis of activities

Cost Drivers = Activities Which Cause Costs To Be Incurred

Pg 319

For additional work use the absorption cost method.

On Budgets Add On Opening Inventory – Closing Inventory

Master Budget Problemo

Material Variance

(standard quantity x standard price) – (actual quantity x actual price)

Material Price Variance

Actual quantity x (standard price – actual price)

Material Usage Variance

Standard Price x ( Standard quantity x Actual quantity)

Labour Variance

(Standard hours x standard rate) x (actual hours x actual rate)

Labour Rate Variance

Actual hours x (standard rate – actual rate)

Labour Efficency Variance

AStandard rate x (standrrd hours – actual hours)

Sales Variance

(standard price x standard quantity) – (actual price x actual quantity)

Sales Price Variance

Actual volume x (stanrd price – actual price)

Sales Volume Variance

Standard Price x (standard sales – actual sales)

Manufacturing Account

Opening Inventory

Purchases Of Raw Materials

Closing Inventory

Direct Expenses

Direct Materials

Direct Labour

= Prime Cost

Production Overheads

Opening Inventory Work In Progress

Closing Inventory Work In Progress

Income Statement

Sales

Opening Inventory

Production Cost

Closing Inventory Finished Goods

Cost Of Sales

Gross Profit

Non Production Overheads