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12 Cards in this Set
- Front
- Back
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ROI
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ROI = Net operating income ÷ Average operating assets
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Residual income
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Residual income = Net operating income − (Average operating assets × Minimum required rate of return
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Net operating income
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Net operating income = ROI × Average operating assets
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Average operating assets
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Average operating assets = Residual income ÷ (ROI − Minimum required rate of return)
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contribution margin
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contribution margin = Sales − Variable expenses
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segment margin =
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segment margin = Contribution margin − Traceable fixed expenses
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Common fixed expenses
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Common fixed expenses = Total fixed expenses – Traceable fixed expenses
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Contribution margin
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Contribution margin = Sales - Variable expenses (manufacturing and nonmanufacturing)
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Net operating income =
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Net operating income = Contribution margin - Fixed expenses (manufacturing and non manufacturing)
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Contribution margin ratio =
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Contribution margin ratio = Contribution margin / Sales
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Break even point (units)
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Break even point (units) = Fixed expenses / Unit contribution margin
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Break even point (dollar sales)
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Fixed expenses / CM ratio
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