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Cost Accounting formulas

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Marudhachalamurthi asked almost 3 years ago

Formulas for various material costing methods with examples

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5 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered over 2 years ago

Maximum Level Maximum Level = Re-order level + Re-order quantity – (Minimum consumption x Minimum Re-order period) Minimum Level Minimum Level = Re-order level – (Average rate of consumption x Average time required to obtain fresh delivery)

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered almost 3 years ago

Maximum Level Maximum Level = Re-order level + Re-order quantity – (Minimum consumption x Minimum Re-order period) Minimum Level Minimum Level = Re-order level – (Average rate of consumption x Average time required to obtain fresh delivery) (or) Minimum Level = Re-order level – (Normal consumption x Normal Re – order period) Re-order level Re-order level = Maximum consumption x Maximum re-order period

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 ROSHNI answered almost 3 years ago

dear friend you have a easy solution the name of solution is CAKART please follow this link [Material Costing] you can find all type of formulas in CAKaRT plz use this thanks https://www.cakart.in/downloads?utf8=%E2%9C%93&search=material%20costing

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Marudhachalamurthi commented about 1 year ago

Ok, Thank you.

Open uri20170510 32134 tcchcu?1494421832 Jitendra Suthar answered almost 3 years ago

- **Inventory Turnover Ratio:** = Cost of materials consumed during the period divided by Average stock of material held during the period **Cost of material Consumed** = Opening Raw material + Purchased Raw Material l – Closing raw material **Average stock of materials** = ½ ( Opening Raw material + Closing Raw materials) **Inventory Turnover in days** = Days in the period divided by Inventory Turnover Ratio - **Input – Output Ratio Analysis** = Standard cost of Actual quantity divided by Standard cost of Standard quantity - **No.of Orders** = Quantity purchased / Consumed divided by Economic Order Quantity(EOQ) - **Desired Purchase quantity** = Difference in fixed Cost divided by Difference in Variable Cost . - Computation of Purchase price of Raw Materials ---------- Units Purchased(No of units X Price per unit/Kg) XXX Less Trade Discount ------------------------------------------ (XXX) Add ------------------------------------------------------------XXX Container Cost(No of containers X Per container) XXX Less Returned containers(No of containers X Per container) (XXX) Add Transport Charges ----------------------------------------- XXX Storage Charges ----------------------------------------- XXX Rent,Taxes,Insurance,Extra --------------------------- XXX ---------- **Total Material Cost XXX** - Cost Per Unit = Total Material Cost divided by Total Units Purchased

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Open uri20170510 32134 tcchcu?1494421832 Jitendra Suthar answered almost 3 years ago

Hiii friend.... Material Costing Formulas ------------------------- - **Maximum Level** Maximum Level = Re-order level + Re-order quantity – (Minimum consumption x Minimum Re-order period) - **Minimum Level** Minimum Level = Re-order level – (Average rate of consumption x Average time required to obtain fresh delivery) (or) Minimum Level = Re-order level – (Normal consumption x Normal Re – order period) - **Re-order level** Re-order level = Maximum consumption x Maximum re-order period - Average Stock Level Average Stock Level = ½ (Maximum Level + Minimum level) (or) Minimum level + ½ of Re-order Quantity - **Danger level** Danger level = Average consumption x maximum re-order period for emergency purchases. - **** Economic Ordering Quantity**** **1.EOQ = √ 2U XP/ S** U = Quantity(units) Purchased or used in a year P = Cost of Placing Order S = Annual cost of storage of one unit **2.EOQ = √ 2AB / CS** A = Annual consumption in units B = Buying cost per order C = Cost per unit S = Storage & carrying cost per annum. **3.EOQ = √ 2UO / C** U = Usage in units per annum O = Ordering cost C = Cost of inventory carrying cost per unit in year. **4.EOQ = √2CO / I** C = Consumption of the material in units per year O = Ordering cost I = Interest & other carrying cost per unit / annum. **5.EOQ = √2AB / S** A = Annual consumption in units B = Buying cost per order S = Storage & carrying cost per annum.

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Marudhachalamurthi commented about 1 year ago

What is the difference between Buying Cost Per order and Cost of Placing Order? Why EOQ Calculated using these many formulas? What is the application of these many formulas in the real time?

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