UGBA 102B Study Guide - Midterm Guide: Direct Labor Cost, Gross Margin, Contribution Margin

• School: Berkeley
• Department: Business Administration Undergraduate Program
• Course: UGBA 102B
• Professor: Brigenshaw

Document Summary

Traditional income statement - for external reporting. Gross margin = sales - cogs (product costs) Net income = gross margin - period costs. Contribution (or variable) format is - used by management. Contribution margin = sales - variable costs. Net income = contribution margin - fixed costs. Organizes costs using variable and fixed cost classifications. Vc per unit = change in cost/ change in activity. The manufacturing overhead account is credited when overhead cost is applied to work in process. Used only when the products manufactured are sufficiently different from each other. Est. total moh cost / est. total amount of the allocation base (ex: dl hours) Predetermined overhead rate x actual dlhs = manufacturing overhead applied. To find pohr: manufacturing overhead applied = predetermined overhead rate x direct labor cost. Oh applied to a job = pohr * amt of the allocation base incurred by the job (ex: hours) Overhead applied = predetermined overhead rate x actual machine-hours.