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Ma1 Management Information: Compiled By: Shahab Shafi

The document provides formulas and definitions for key accounting and costing terms including prime cost, conversion cost, production cost, absorption cost, marginal cost, performance measurement for cost and profit centers, and investment center calculations like return on capital employed and residual income. It was compiled by Shahab Shafi of the SKANS School of Accountancy in Peshawar.

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shahab
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731 views

Ma1 Management Information: Compiled By: Shahab Shafi

The document provides formulas and definitions for key accounting and costing terms including prime cost, conversion cost, production cost, absorption cost, marginal cost, performance measurement for cost and profit centers, and investment center calculations like return on capital employed and residual income. It was compiled by Shahab Shafi of the SKANS School of Accountancy in Peshawar.

Uploaded by

shahab
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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SKANS SCHOOL OF ACCOUNTANCY, PESHAWAR

MA1 MANAGEMENT INFORMATION


FORMULA SHEET

PRIME COST CONVERSION COST


Direct material X Direct labour X
Add: Direct labour X Add:Direct expenses X
Direct expenses X
=Prime cost XXX =Conversion cost XXX

PRODUCTION COST
ABSORPTION COST MARGINAL COST
SALES XXX SALES XXX
LESS: COS LESS: COS
DIRECT MATERIAL (X) DIRECT MATERIAL (X)
DIRECT LABOUR (X) DIRECT LABOUR (X)
DIRECT EXPENSES (X) DIRECT EXPENSES (X)
FPOH (X) VARIABLE COST OF SALES (XXX)
TOTAL PRODUCTION COST (XXX) =CONTRIBUTION XXX
=GROSS PROFIT XXX -FPOH (XXX)
PROFIT XXX
Contribution=sales-variable costs

PERFORMANCE MEASURMENT
COST CENTERS
1. COST PER UNIT TOTAL COST/TOTAL NO OF UNITS
2. EFFICIENCY RATIO STANDARD HOURS OF ACTUAL PRODUCTION *100
ACTUAL HOURS WORKED
3. CAPICITY RATIO ACTUAL HOURS WORKED *100
BUDGETED HOURD
4. PRODUCTION VOLUME RATIO STANDARD HORUS OF ACTUAL PRODUCTION*100
BUDGETED HOURS

PROFIT CENTERS
5. PROFIT MARGIN PROFIT *100
SALES
6. GROSS PROFIT MARGIN GROSS PROFIT*100
SALES
7. OPERATING PROFIT MARGIN OPERATING PROFIT *100
SALES
8. NET PROFIT MARGIN NET PROFIT*100
SALES

1 Compiled by: Shahab Shafi


INVESTMENT CENTER
ROCE PBIT *100
Return on capital emplyed CE
Profit before interest and tax
Capital employeed= total assets- current liabilities
RI Controllable profits-notional interest
Residual income
Asset turnover Sales/CE= times

2 Compiled by: Shahab Shafi

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