Cost of goods manufactured and sold statement formulas:

Prime Cost = Direct Materials Cost + Direct Labor Cost

Total Factory Cost or Manufacturing Cost = Direct Materials + Direct Labor Cost
+ Factory Overhead
Total production/manufacturing cost = prime cost FOH cost
Raw material consumed = raw material opening + material purchased material closi
ng
Conversion Cost = Direct Labor Cost + Factory Overhead Cost
Cost of Goods Manufactured (COGM) = Total Factory Cost + Opening Work in Process
Inventory - Ending Work in Process Inventory
Or
Cost of Goods manufactured = Direct materials cost + Direct labor cost + Factory
overhead cost + Opening work in process inventory - Ending work in process inve
ntory
Cost of goods sold (COGS) = Cost of goods manufactured + Opening finished goods
inventory - Ending finished goods inventory
Or
Cost of goods sold = Direct materials cost + Direct labor cost + Factory overhea
d cost + Opening work in process inventory - Ending work in process inventory +
Opening finished goods inventory - Ending finished goods inventory
Number of units manufactured = Units sold + Ending Finished Goods units - Openin
g finished goods units
Per unit cost of goods manufactured = Cost of goods manufactured / Units manufac
tured
Materials used or consumed = Opening inventory or materials + Net purchases of m
aterials - Ending inventory of materials
Goods available for sale = cost of goods manufactured + opening finished goods
Contribution margin = sales variable cost
Income statement formulas:
Gross profit = Net sales - Cost of goods sold
Income statement/Operating profit = Gross profit - Operating expenses
Operating or commercial expenses = Selling or marketing expenses + General or ad
ministrative expenses
Per unit gross profit = Gross profit / No. of units sold
Per unit net profit = Net profit / No. of units sold
Percentage of GP to sales = (Gross profit / Net sales) × 100
Percentage of net profit to sales = (Net profit / Net sales) × 100
Cost Volume Profit (CVP) Formulas:
The following formulas have been derived from cost volume profit (CVP) relations
hip chapter.
Contribution margin = Sales - Variable expenses (manufacturing and non manufactu
ring)
Net operating income = Contribution margin - Fixed expenses (manufacturing and n
on manufacturing)
Contribution margin ratio = Contribution margin / Sales
Break even point (units) = Fixed expenses / Unit contribution margin
Break even point (dollar sales) = Fixed expenses / CM ratio
Units sales to attain target profit = (Fixed expenses + Target profit) / Unit co
ntribution margin
Dollar sales to attain target profit = (Fixed expenses + Target profit) / Contri
bution margin ratio
Margin of safety = Total budgeted or actual sales - Break even sales
Margin of safety percentage or margin of safety ratio = Margin of safety / Total
budgeted or actual sales
Degree of operating leverage = Contribution margin / Net operating income