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# Managerial/Cost Accounting Formulas

Cost Accounting Formulas

Cost of Goods Sold formulas

•  Conversation Cost = Direct labor cost + Factory Overhead Cost
• Cost of Goods Manufactured (COGM) = Direct Factory Cost + Opening Work in Progress Inventory – Ending Work in Progress Inventory
• Cost of Goods Sold (COGS) = Cost of Goods Manufactured + Opening Finished Goods Inventory – Ending Finished Goods Number of Units Manufactured = Units Sold + Ending Finished Goods Units – Opening Finished Goods Units
• Per unit cost of goods manufactured = Cost of goods manufactured / Units manufactured
• Materials used = Opening inventory + Net purchases of materials – Ending inventory of materials

Income Statement Formulas

• Gross Profit = Net sales – Cost of goods sold
• Operating Profit = Gross profit – Operating expenses
• Commercial Expenses = Marketing / Selling expenses + Administrative/General expenses
• Per Unit Gross Profit = Gross profit / No. of units sold
• Per unit net profit = Net profit / No. of units sold
• Percentage of gross profit to sales = (Gross profit / Net sales) x 100
• Percentage of Net Profit to sales = (Net profit / Net sales) x 100

Cost Volume Profit (CVP) Formulas

•  Contribution margin = Sales – Variable expenses
• Net Operating Income = Contribution margin – Fixed expenses (Manufacturing & non manufacturing)
• Contribution margin ratio = Contribution margin / Sales
• Break Even Points (units) = Fixed expenses / unit contribution margin
• Break Even Points (Dollar sales) = Fixed expenses / CM ratio
• Unit sales to attain target profit = (Fixed expenses + target profit) / Unit contribution margin
•  Dollar sales to attain target profit = (Fixed expenses + target profit) / Contribution margin ratio
• Margin of Safety = Total budgeted or actual sales – break even sales
• Margin of safety percentage or margin of safety ratio = Margin of safety / Total budgeted or actual sales
• Degree of Operating leverage = Contribution margin / Net operating income