# Formula1 - ACCY 302(Chen Fall 2008 Formula Sheet for ACCY...

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ACCY 302 (Chen) Fall 2008 Formula Sheet for ACCY 302 Note: This formula sheet summarizes the formulas you should know for the final exam. The sole purpose is to help you prepare for the final exam. (Please do not bring it to the final exam though). This formula sheet only covers formulas that fall under major topics after the midterm exam and is not intended to be exhaustive. Relevance (including CVP analysis): Two ways to prepare income statements: 1) Absorption costing; and 2) Variable costing. Both are based on the fundamental accounting equation: Revenues – Expenses = Income Absorption Costing (used for external financial reporting): gross margin (a.k.a., gross profit) = revenue - cost of goods sold cost of goods sold (COGS) = all manufacturing costs (regardless of behavior) gross margin percentage = gross margin / revenue operating income = revenue - COGS - SG&A where SG&A = variable and fixed selling, general, & administrative expenses Variable Costing (a.k.a. contribution approach; used for CVP analysis and in decision- making):

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