COSTING FORMULLA............

OVERHEAD COSTING FORMULAS

Predetermined absorption rate

estimated or budgeted overhead for the period

estimated or budgeted units of base for the period

Direct material cost % rate

budgeted overhead x 100

budgeted direct material costs

Direct labor cost % rate

budgeted overhead x 100

budgeted direct labor cost

Prime cost % rate

budgeted overhead X 100

prime cost

Direct labor hour rate

budgeted overhead

budgeted direct labor hours

Machine hour rate

budgeted overhead

budgeted machine hours

Cost unit rate

budgeted overhead

budgeted output

 LABOR COSTING FORMULAS

Gross pay

Hours worked x rate per hour or number of units produced x rate per unit

Halsey scheme

50% of time saved x rate per hour

Halsey Weir scheme

1/3 of time saved x rate per hour

Rowan scheme

(time taken/time allowed x time saved) x rate per hour

Time saved

time allowed – time taken

Labor turnover

Avg no of employees leaving who have to be replaced  x 100

average number employed

FORMULAS USED IN STANDARD COSTING

Material cost variance

Standard material cost less actual material cost

Material price variance

(standard price less actual price) x actual quantity purchased or used

Material usage variance

(standard quantity for actual output less actual quantity) x standard price

Material mix variance

(actual mix less standard mix ) x standard price

Material yield variance

(standard yield less actual yield) x standard cost

Labor cost variance

Standard wage cost less actual wage cost

Labor rate variance

(standard rate less actual rate ) x actual hours

Labor efficiency variance

(standard hours for actual output less actual hours worked) x standard rate

Idle time variance

Idle time x standard rate

Variable production cost variance

Standard variable overhead less actual variable overhead

Variable overhead expenditure variance

(standard overhead rate less actual overhead rate) x actual hours

Fixed overhead cost variance

Overhead absorbed less overhead incurred

Fixed overhead expenditure variance

(budgeted fixed overhead less actual fixed overhead)

Fixed overhead volume variance

(budgeted volume-actual volume) x standard absorption rate

Fixed overhead capacity variance

(budgeted hours-actual hours) x standard absorption rate

Fixed overhead productivity variance

(standard hours for actual output-actual hours worked) x standard absorption rate

Sales value variance

(budgeted quantity x standard selling price) less (actual quantity x actual selling price)

Sales price variance

(standard selling price-actual selling price) x actual quantity sold

Sales volume variance

(budgeted quantity-actual quantity) x standard selling price or standard profit or standard contribution

Sales margin variance

(budgeted quantity x standard profit)- (actual quantity x actual profit)

Sales contribution variance

(budgeted quantity x standard contribution)-(actual quantity x actual contribution)

Sales allowance variance

(budgeted allowance-actual allowance) x actual quantity sold

Sales mix variance

(standard mix-actual mix) x standard selling price or standard profit or standard contribution

Sales quantity variance

(budgeted quantity-actual quantity in standard mix) x standard price or standard profit or standard contribution