Final B4 Flashcards
Which type of costing method is useful for external reporting (Variable or Absorption costing)
Absorption costing only
What does the production budget start with?
The sales budget
What ratio measures which product has the biggest positive impact on a company?
CM Ratio (SP-VC) / SP
What is the formula for BE point?
Total Fixed costs / CM per unit
What type of costing method would encourage larger inventories?
Absorption costing
What are the 3 things associated with cost-based pricing?
Price stability, Price justification, Fixed-cost recovery
Define margin of safety
Excess of sales over break even sales
How do you calc break even sales
TFC/CM ratio
What is the formula for desired profit in units?
Pretax profit/ CM per unit
If a company were to issue stock for cash, how would Total debt to assets and Working capital be impacted?
Decrease in Debt to Assets
Increase WC
What is the formula for inventory turnover?
COGS/ avg Inv
What type of cost can be seen as relevant and nonrelevant cost?
Variable costs
How should the performance of a standard cost be evaluated?
Actual cost with flexible budgets
How do you calculate a efficiency variance?
(Actual Quantity - Std Quantity) * Std price
What is the Flexible budget variance
Actual costs LESS (Std rate*actual units)
