Term
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Definition
| = Direct Materials Cost + Direct Labor Cost |
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Term
| Total Factory Cost or Manufacturing Cost = |
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Definition
| Direct Materials + Direct Labor Cost + Factory Overhead |
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Term
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Definition
| = Direct Labor Cost + Factory Overhead Cost |
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Term
Cost of Goods Manufactured (COGM) =
Or
Cost of Goods manufactured = |
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Definition
= Total Factory Cost + Opening Work in Process Inventory - Ending Work in Process Inventory
Or
= Direct materials cost + Direct labor cost + Factory overhead cost + Opening work in process inventory - Ending work in process inventory |
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Term
| Cost of goods sold (COGS) = |
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Definition
| = Cost of goods manufactured + Opening finished goods inventory - Ending finished goods inventory |
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Term
| Number of units manufactured = |
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Definition
| = Units sold + Ending Finished Goods units - Opening finished goods units |
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Term
| Per unit cost of goods manufactured = |
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Definition
| = Cost of goods manufactured / Units manufactured |
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Term
| Materials used or consumed = |
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Definition
| = Opening inventory or materials + Net purchases of materials - Ending inventory of materials |
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Term
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Definition
| = Net sales - Cost of goods sold |
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Term
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Definition
| = Gross profit - Operating expenses |
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Term
| Operating or commercial expenses = |
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Definition
| = Selling or marketing expenses + General or administrative expenses |
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Term
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Definition
| = Gross profit / No. of units sold |
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Term
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Definition
| = Gross profit / No. of units sold |
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Term
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Definition
| = Net profit / No. of units sold |
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Term
| Percentage of GP to sales = |
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Definition
| = (Gross profit / Net sales) × 100 |
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Term
| Percentage of net profit to sales = |
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Definition
| = (Net profit / Net sales) × 100 |
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Term
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Definition
| = Sales - Variable expenses (manufacturing and nonmanufacturing) |
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Term
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Definition
| = Contribution margin - Fixed expenses (manufacturing and non manufacturing) |
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Term
| Contribution margin ratio = |
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Definition
| = Contribution margin / Sales |
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Term
| Break even point (units) = |
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Definition
| = Fixed expenses / Unit contribution margin |
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Term
| Break even point (dollar sales) = |
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Definition
| = Fixed expenses / CM ratio |
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Term
| Units sales to attain target profit = |
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Definition
| = (Fixed expenses + Target profit) / Unit contribution margin |
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Term
| Dollar sales to attain target profit = |
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Definition
| = (Fixed expenses + Target profit) / Contribution margin ratio |
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Term
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Definition
| = Total budgeted or actual sales - Break even sales |
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Term
| Margin of safety percentage or margin of safety ratio = |
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Definition
| = Margin of safety / Total budgeted or actual sales |
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Term
| Degree of operating leverage = |
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Definition
| = Contribution margin / Net operating income |
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