B Formulas Flashcards
(20 cards)
Profit per unit?
Selling price - prime cost - overheads
Overhead absorption rate (revenue based)?
Total overheads / total revenue
Overhead cost per unit?
Overhead amount / Number of units
Cost per machine set-up?
Total machine set-up costs/total number of setups
Steps to calculate overhead cost per unit?
Calculate cost per unit of driver
Calculate cost of a batch of product
Overhead amount / amonut produced in a single batch
Steps to calculate set-up cost per unit?
Number of machine set-ups
Cost driver rate
Total set-up costs
Set up cost per unit
Throughput per unit calculation?
Price - material cost
Throughput accounting ratio?
((Price - materials) / bottleneck resource per hour) / (other factory costs and labour / total hours of bottleneck)
OR
Return per factory hour / cost per factory hour
Contribution calculation?
Selling price - variable costs
When a TPAR is positive?
We earn more than what the operation costs
Return per factory hour calculation?
Throughput per unit / product time on bottleneck resource
Cost per factory hour calculation?
Total factory costs / total time available on bottleneck resource
OAR ratio?
Total overheads/total revenue
Where in the fraction would Return per factory hour be placed?
Numerator
Where in the fraction would Factory costs per hour be placed?
Denominator, can also be called conversion costs per factory hour
What happens with a profit margin?
Total cost per unit * profit margin %
Overhead absorption rate?
Total overhead cost / Total number of direct labour hours
Get total units from remaining hours?
Reamining hours / (Machine hours per unit)
When question says single overhead rate based on revenue?
Revenue is the denominator in the fraction
Throughput contribution per hour calculation?
Throughput contribution per unit × Units per hour
