Cost accounting formulas

The following formulas can be used to find out different costs.

Prime cost = Direct material consumed + Direct labour

Conversion Cost = Direct material + Factory overhead

Factory cost = Direct material + Direct labour + Factory overhead

Cost of Goods Manufactured = Direct material consumed + Direct labour + Factory overhead + Opening WIP – Closing WIP

Cost of Goods sold = Direct material consumed + Direct labour + Factory overhead + WIP opeing – WIP closing + Opening finished goods – Closing finished goods

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