MOB Costing Flashcards
What is the Cost of Production?
Cost of Production refers to the total costs a business incurs for the production of a specific amount of products or services.
What does the term direct costs refer to?
Direct costs refer to any cost that can be directly attributed to the cost of a specific product or service.
What does the term indirect costs refer to?
Indirect costs refer to any cost that cannot be directly identified in the production of a specific product or service.
What does the term fixed costs refer to?
Fixed costs refer to the expenses of a business that do not change regardless of its level of output.
What does the term variable costs refer to?
Variable costs refer to the expenses of a business that change with the level of production.
Contribution formula
Total revenue - Total variable cost
Contribution Per Unit formula
Selling price - Variable cost per unit
Profit using Marginal Costing Method formula
Total Contribution - Total fixed cost
Marginal Costs per unit formula
Variable costs per unit/Units of output
Marginal Costs formula
Change in costs/Change in quantity
Absorption costs formula
Total Costs/Units of output
Profit using the Absorption Costing Method formula
Total revenue - Total Costs
Break-even Units
Total fixed cost/Contribution per unit
Contribution to sales ratio
(Contribution per unit/Selling price) x 100
Break-even Point in Sale
Fixed cost/Contribution to sales ratio
