Economic Batch Quantity (EBQ)

Manufacturers who utilize a batch costing system need to determine the batch size which will minimize the total cost of production. The economic batch quantity formula can be used to calculate this value.

Economic Batch Quantity (EBQ) November 7th, 2018Team
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Batch Costing Method

Batch costing can be used by both manufacturing and service industries. The purpose of the batch cost system is to allow a business to calculate the total cost of a batch of identical units in order that a unit cost, selling price and profitability can be determined.

Batch Costing Method October 31st, 2018Team
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Manufacturing Cost Components

Manufacturing costs are those which relate to the manufacture of a product and consist of three basic manufacturing cost components which are materials, labor, and expenses.

Manufacturing Cost Components September 17th, 2018Team
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Sales Mix and Quantity Variances

The sales volume variance has two components, the sales mix variance and the sales quantity variance. The sales mix variance shows the effect of the difference between the actual and budgeted sales mix. The sales quantity variance shows the effect of the difference between the actual volume sold at the budgeted mix and the budgeted volume.

Sales Mix and Quantity Variances July 18th, 2018Team
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Sales Variance Analysis in Accounting

The total sales variance sometimes referred to as the sales value variance is the difference between the actual sales and budgeted sales and can be split and analysed into the sales volume variance and the sales price variance.

Sales Variance Analysis in Accounting July 16th, 2018Team
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Predetermined Overhead Rate

A business calculates a predetermined overhead rate based on estimated overhead and activity levels in order to be able to apply overhead to its product costs.

Predetermined Overhead Rate October 9th, 2017Team
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Incremental Analysis Approach

Make or buy, sell or process further, keep or drop, accept or reject a special order, and repair or replace are all examples of decisions which can made using the incremental analysis approach. The technique considers only relevant costs when a business needs to make a choice between alternative options.

Incremental Analysis Approach October 2nd, 2017Team
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Byproduct Accounting

Immaterial waste products arising from a production process are known as byproducts or by-products. The products are usually accounted for in a non-GAAP manner using either the production method or the sales method. The production method recognizes the value of the byproduct when it is produced, and the sales method recognizes the value when the byproduct is sold.

Byproduct Accounting July 5th, 2017Team
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