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30 Cards in this Set
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 Back
Calculate Carges for a Job

(Labor Charge per hour * Hours) +
(Cost of parts and materials) + (Material Loading Charge) 

Total Budgeted Costs

Fixed Costs + (VC Per Unit x Activity Level)


Return on Investment

Controllable Margin / Average Operating Assets


Controllable Margin

Contribution Margin  Controllable Fixed Costs


Residual Income

Controllable Margin  (Min. Rate of Return x Average Operating Assets)


Total Materials Variance

(AQ x AP)  (SQ x SP)


Materials Price Variance

(AQ x AP)  (AQ x SP)


Materials Quantity Variance

(AQ x SP)  (SQ x SP)


Total Labor Variance

(AH x AR)  (SH  SR)


Labor Price Variance

(AH x AR)  (AH x SR)


Labor Quantity Variance

(AH x SR)  (SH x SR)


Total Overhead Variance

Actual Overhead  Overhead Applied*
*based on standard hours allowed 

Overhead Controllable Variance

Actual Overhead  Overhead Budgeted*
*based on standard hours allowed 

Overhead Volume Variance

Overhead Budgeted*  Overhead Applied*
*based on standard hours allowed 

Overhead Volume Variance relies solely to __________.

Fixed Costs


Overhead Volume Variance (second way)

Fixed Overhead Rate x (Normal Capacity Hours  Standard Hours Allowed)


Variances are reported on the __________.

Income Statement


Breakeven Point in Units ( for sales mix)

Fixed Costs / Weighted Average Unit Contribution Margin


Cash Payback Period

Cost of Capital Investment / Net Annual Cash Inflow


Net Present Value

Present Value of Future Cash Inflows  Capital Investment


Discount rate used is determined by the ___________.

Required rate of return.


Profitability Index

Present Value of Cash Inflows / Initial Investment


Internal Rate of Return Factor

Capital Investment / Net Annual Cash Inflow


Finding the Internal Rate of Return

Find the Internal Rate of Return Factor, Look in Table 4 (Present Value of an Annuity of 1) for closest value under the given periods.


Annual Rate of Return

Expected Annual Net Income / Average Investment*
Average Investment = (Original Investment + Salvage Value) / 2 

Target Selling Price

Cost + (Markup Percentage x Cost)


Markup Percentage

Desired ROI Per Unit / Total Unit Cost
(In other words, Target Selling Price = Total Unit Cost + Desired ROI Per Unit) 

Labor Charge per hour

Hourly Labor Rate Per Hour + OH Per Hour Charge + Profit Margin Per Hour


Material Loading Charge

(Overhead Costs / Total Invoice Cost, Parts and Materials) + Profit Margin
(as a percentage) 

Minimum Transfer Price

Variable Cost + Opportunity Cost
