BusA 8 Ch 20
unit price factor (equation)
= (actual selling price per unit - planned selling price per unit) x actual units sold
sales quantity factor
= (actual units sold - planned units of sales) x planned sales price
unit cost factor
= (planned cost per unit - actual cost per unit) x actual units sold
variable cost quantity factor
= (planned unit of sales - actual units sold) x planned unit cost
absorption costing
is required under GAAP for financial statements distributed to external users. the cost of goods manufactured includes direct materials, direct labor, and factory overhead costs. both fixed and variable factory costs are included as part of the factory overhead.
contribution margin
manufacturing margin less variable selling and administrative expenses.
manufacturing margin
sales less variable cost of goods sold. variable costs of goods sold consists of direct materials, direct labor, ad variable factory overhead.
variable costing / direct costing
the cost of goods manufactured includes only variable manufacturing costs. thus, cost of goods manufactured includes only variable manufacturing costs. Thus, the cost of good manufactured consists of the following: direct materials, direct labor, and variable factory overhead.
quantity factor
the effect of a difference in the number of units sold, assuming no change in unit sales price or unit costs.
unit price factor
the effect of a difference in unit sales price or unit cost on the number of units sold