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45 Cards in this Set
- Front
- Back
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Absorption Approach |
Revenue Less: COGS _____________________ Contribution Margin Less: Fixed Cost ______________________ Net Income |
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Contribution Approach |
Revenue Less: Variable Cost _____________________ Contribution Margin Less: Fixed Cost _____________________ Net Income |
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Contribution Margin Ratio |
Contribution Margin/Revenue |
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Absorption Costing |
Product Cost -Direct Materials -Direct Labor -Variable Manufacturing Overhead -Fixed Manufacturing Overhead Period Cost -Variable & Fixed SG&A |
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Variable Costing |
Product Cost -Direct Materials -Direct Labor -Variable Manufacturing Overhead Period Cost -Fixed Manufacturing Overhead -Variable & Fixed SG&A |
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No Change in Inventory |
Absorption Net Income = Variable Net Income
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Increase In Inventory |
Absorption Income > Variable Net Income |
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Decrease In Inventory |
Absorption Net Income < Variable Net Income |
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Break Even Units |
Total Fixed Cost / Contribution Marg. Per Unit |
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Break Even Dollars |
- Unit Price X Break Even Point Units or -Total Fixed Cost/ Contribution Margin Ratio |
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Sales Price Per Unit |
(Fixed Cost + Pretax Profit) / Contribution Margin Ratio |
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Sales Dollars Needed for Desired Profit |
Variable Cost + Fix Cost + Pretax Profit Or (Fixed Cost + Pretax Profit) / Contribution Marg Ratio |
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Profit |
Units Above Break Even Point X Contribution Marg |
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Sales Price Per Unit |
(Fix Cost + Var Cost + Pretax Profit) / # of Units Sold |
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Margin of Safety Dollars |
Sales - Break Even Dollars |
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Margin of Safety Percentage |
Margin of Safety Dollars / Total Sales |
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Target Cost |
Market Price - Required Profit |
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Linear Regression |
Y = A +B(X) Y= Dependent Variable A= Y Axis (if "y" is total cost a is fixed cost) B= The slope (if "y" is total cost "X" is output then ''B" measure the change in total cost) |
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Total Cost |
(Variable Cost Per Unit) X (Number of Units) |
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Operating Budget |
-Sales Budget -Production Budget - Selling Budget |
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Mechanics of Master Budget |
1-Operating Budget a) Sales Budget b) Production Budget c) SG&A Budget d) Personal Budget 2-Financial Budget a) Pro Forma Budget b) Cash Budget |
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Required Level of Production |
Budget Sales Plus: Desired Ending Inventory Less: Beginning Inventory _________________________________ Budgeted Production |
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Number of Units to be Purchased |
Units of Direct Material Needed Plus: Desired Ending Inventory Less: Beginning Inventory ________________________________ Units of Direct Material to be Purchased |
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Cost of Direct Material Purchased |
Units of Direct Material Purchased X Cost Per Unit |
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Direct Material Usage Budget |
Beginning Inventory (at cost) Plus: Purchases (at cost) Less: Ending Inventory (at cost) ___________________________________ Direct Material Usage |
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Direct Labor Budget |
Budgeted Production Units X Hours Required Per Unit ___________________________ Total Hours Needed X Hourly Rate ___________________________ Total Wages |
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Cost of good Manufactured |
Beg Finished Goods Inventory Plus: Beginning Finished Goods Less: Ending Finished Goods _________________________________ Cost of Goods Sold |
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Components of SG&A |
1. Variable Expense - Sales Commission - Delivery Expenses - Bad Debt Expense 2. Fixed Expenses - Sales Salaries - Advertising - Depreciation 3. General Admin Expenses - Admin Salaries - Accounting & Data Processing - Depreciation - Other Admin Expense |
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Standard Direct Cost |
Standard Price X Standard Quantity |
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Standard Indirect Cost |
Standard Application Rate X Standard Qty. |
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Direct Material Variance |
Actual Qty. Purchased(Actual Price- Standard Price) |
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Direct Material Qty. Usage Variance |
Standard Price(Actual Qty. Used - Standard Qty. Allowed) |
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Direct Labor Rate Varaiance |
Actual Hours Worked(Actual Rate - Standard Rate) |
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Direct Labor Variance |
Standard Rate(Actual Hours Worked - standard Hours Allowed) |
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S. A. D. |
Standard - Actual = Difference |
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P. U. R. E. |
Price Variance (Direct Material) Usage Variance ( Direct Material) Rate Variance (Direct Labor) Efficiency Variance (Direct Labor) |
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DADS |
DA= Difference X Actual DS= Difference X Standard DA= Difference X Actual DS= Difference X Stadard |
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PURE with DADS |
P - Difference X Actual U - Difference X Standard R - Difference X Actual E - Difference X Actual |
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Variable Overhead Rate Variance |
Actual Hours( Actual Rate - Standard Rate) |
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Variable Overhead Efficiency |
Standard Rate(Actual Hours - Standard Hours Allowed) |
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Fix Overhead Variance |
Actual fix Overhead Budgeted Fix Overhead |
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Fix Overhead Volume Variance |
Budgeted Fix Overhead - Standard Fix Overhead Cost Allowed |
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Application of Overhead (Standard Costing) |
Two Steps Needed 1. Calculate Overhead Rate = Budgeted Overhead Cost / Estimated Cost Driver 2. Applied Overhead = Standard Cost Driver x Overhead Rate From Step 1 |
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Sales Price Variane |
(Actual Sales Price/Unit) - (Budgeted Sales Price/unit) X Actual Units Sold |
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sales Volume Variance |
(Actual Units Sold - Budgeted Sales) X Standard Contribution Margin Per Unit |
