Controlling 2 Flashcards
Calculate ROI
Net operating income / average operating assets
Calculate Margin
Net operating income / sales
Calculate turnover
sales / average operating assets
Calculate ROI via turnover
turnover * margin
Calculate residual income
Net operating income - (average operating assets * minimum required rate of return)
How can minimum required rate of return be expressed
-WACC
-ROI percentage
Income statement
Sales
-variable expenses
= contribution margin
- fixed expenses
= Net operating income
–> only traceable fixed expenses!!!
How to calculate minimum transfer price
variable costs per unit (-evtl. savings in transfer) + CM on lost sales / number of units transferred
Maximum transfer price
outside purchase price
Process activity-based costing
- Determine activity rates for each activity type
- Multiplicate activity rate with expected activity for each division/model
- Calculate unit product cost with newly calculated manufacturing overhead cost
- Calculate new selling price with mark-up
Process target costing
- Determine the market price
- Determine the desired profit
- Calculate the target cost
-market price - desired profit
Target values Life Cycle Costing
-life cycle costs
-life cylce revenues
-life cycle operating income
