C253 Advanced Managerial Accounting

What are absorption costing product costs? - Materials, Labor, Variable Manufacturing Overhead and Fixed Manufacturing Overhead (No selling and general admin) What are variable costing product costs? - Materials, Labor and Variable Manufacturing Overhead (no fixed costs) Absorption Cost - (((Material+Labor+Variable Manufacturing Overhead)*Units Produced)+Fixed Costs)/Units Produced Net Income - Sales Revenue - Expense (Revenue - (Absorption Cost*Units Sold) - (Variable SG&A*Units Sold)-Fixed SG&A Fixed Manufacturing Overhead Per Unit - (COGS-Variable Manufacturing)/Units Sold How do variable and absorption costing compare? - Net income under absorption costing is higher than variable costing when units produced are greater than units sold Gross Profit Margin - ((# Units Sold*Price per Unit)-((# Units Sold*(Materials+Labor+Overhead)))/(# Units Sold*Price Per Unit) Activity Rate - Estimated Overhead/Total Product Hours Allocated Overhead - (Total Overhead for Activity/Total Used) & compute for each activity