BUS 2 Planning Techniques (1)

Question 1

Coefficient of determination, r squared, multiple regression

Answer 1

Percentage of variation in the dependent variable explained by the variation in the independent variables

Measures dependent variables

Question 2

Absorption costing vs Variable costing

Answer 2

• Absorption (Fixed and Variable Included): fixed factory overhead —> product cost (included inventory on bs)
• Variable (Only Variable): period cost —> (included as exp on IS)

*Production exceeds sales NI will grow b/c fixed factory stays on bs and not income statement

Question 3

Flexible Budget

Answer 3

Bud Tot Cost = (Var Cost Per Unit x Activ Lev) + Fixed Costs

Question 4

Direct Materials Variances Formula

Answer 4

Materials Price Variance = (Actual - Standard) x QUANTITY PURCHASED

Materials Quantity Usage Variance = (Actual - Standard) x STANDARD PRICE

Question 5

Direct Labor Variances Formula

Answer 5

Labor Rate Variance = (Actual - Standard) x ACTUAL HOURS

Labor Efficiency Variance = (Actual Hr - Standard Hr) x STANDARD LABOR RATE

Question 6

Filling a special order the price should exceed

Answer 6

Special Order = Variable Cost per Unit

Special Order = Variable Cost + Contribution Margin Next Best Alternative

Question 7

PURE DADS DADS

Answer 7

P (Price Variance) DM *Diff x Actual
U (Usage Quantity Variance) DM *Diff x Stan
R ( Rate Variance) DL *Diff x Actual
E (Efficiency Variance) DL *Diff x Stan

Question 8

Which standard cost variance would be least controllable by the production supervisor

Answer 8

Overhead Volume

Stand Hrs vs Overhead Applied (pre determined rate to WIP)

Little control over established standard and budgeted amounts

Question 9

Safety Margin

Answer 9

Safety Margin = Total Sales - Breakeven Sales

Breakeven Sales = Fix Cost / (Fix Costs / Sales)

Question 10

Critical Success Factors

Answer 10

1. Financial solvency and return
2. Customer Satisfaction
3. Internal business processes
4. Learn and Grow Human Resources

Question 11

Performance Reports

Answer 11

*Specific
User focus
Exceptional items that are controllable