Final Exam Flashcards
(22 cards)
How do you calculate target selling price?
Total unit cost + (Markup percentage × Total unit cost) = Target selling price
How do you calculate markup %?
desired ROI/total unit cost
desired ROI=invested assets x budgeted ROI %/budgeted units
How do you calculate target cost?
investment x ROI % = return on investment total
calculate ROI/unit.
target cost = market price - desired profit
How do you prepare a production budget?
Expected unit sales + desired ending FG Inv = total reqd units. Less beg. FG inv = reqd. prodn. units.
How do you prepare a mfg oh budget?
Variable costs: indirect materials, labour, maintenance. Fixed costs: Supervisor salaries, depreciation, and maintenance
How do you prepare a cash budget?
beg. cash balance + receipts = collns from customers. + sale of equip =total receipts. total available cash. less disbursements, direct mats, dir labour, mfg OH, selling & admin, securities = total disbursements.
What does a responsibility report look like?
sales - variable costs = contr margin. less controllable fixed costs = controllable margin
ROI with controllable margin?
Controllable margin/average operating assets
Residual income?
Controllable margin - (min. rate of return x avg. operating assets)
standard mat. price per pound?
purch price net of discounts + freight + rec. & handling
std mats quantity?
reqd mats + waste + spoilage
std labor rate?
wage rate + cola + payroll tax + fringe benefits
std labour hours?
act prodn time + rest periods + setup & downtime = std. direct labour hours per unit
materials variance?
act quantity x act price - std quantity x std price
mats quantity variance?
act quantity x std price - std quantity x std price
labour price variance?
act hours x act rate - act hours x std rate
labor quantity variance?
act hours x std rate - std hours x std rate
cash payback?
cost of capital/net annual cash flow
net present value?
pv of net cash flows - capital investment
profitability index?
pv of net cash flows/initial investment
IRR?
capital investment/net annual cash flows = irr factor. Look up factor in table to get %.
Annual rate of return?
expected annual net income / average investment
