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15 Cards in this Set
- Front
- Back
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Materials Price Variance |
AQ(AP-SP) |
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Materials Quantity Variance |
SP(AQ-SQ) |
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Labor Rate Variance |
AH(AR-SR) |
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Labor Efficiency |
SR(AH-SH) |
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Variable Overhead Rate Variance |
AH(AR-SR) |
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Variable Overhead Efficiency Variance |
SR(AH-SH) |
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Cost Center |
Control over costs, but not revenue or use of funds. Ex) acct, finance, legal, general admin Evaluate via cost variances |
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Profit Center |
Control over both costs & revenue, but not use.
Ex) manager of amusement park
Evaluate by comparing actual profit to targeted/budgeted profit |
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Investment center |
Control over everything: cost, revenue, investments
Ex) Vice president of company
Evaluate via ROI |
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ROI |
The higher the ROI the greater the profit earned per dollar invested in the segments operating assets. ROI= NOI/Avg Operating Assets ROI= Margin x Turnover |
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Margin |
Margin= NOI/Sales |
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Turnover |
Turnover = Sales/Avg Operating Assets |
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Residual Income |
Residual Income = NOI-(Avg Operating Assets x Min. Required Rate of Return) |
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Spending Variance |
Spending Variance = Rate Variance + Efficiency Variance |
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Return on investment |
Return on investment = NOI/Avg Operating Assets |
