Managerial ACC Flashcards
Variable Cost
Change in cost / Change in activity
Change in cost / Change in activity
Variable Cost
Fixed Cost
total cost - variable cost element (variable cost x high or low activity) =
total cost - variable cost element (variable cost x high or low activity) =
Fixed Cost
Product Cost
Direct Materials + Direct Labor + Manufacturing Over Head =
Direct Materials + Direct Labor + Manufacturing Over Head =
Product Cost
Period Cost
selling expenses + admin expenses =
selling expenses + admin expenses =
Period Cost
Conversion Cost
Direct Labor + Manufacturing Over Head =
Direct Labor + Manufacturing Over Head =
Conversion Cost
Prime Cost
Direct Materials + Direct Labor
Direct Materials + Direct Labor
Prime Cost
Margin Of Safety formula
Total Sales - (Break-Even Contribution Units x Selling Price)
Total Sales - (Break-Even Contribution Units x Selling Price)
Margin Of Safety formula
Degree of Operating Leverage calculation
Contribution Margin / net operating income
Contribution Margin / net operating income =
Degree of Operating Leverage calculation
Degree of Operating Leverage concept
how sensitive net operating income to percentage change in dollar
how sensitive net operating income to percentage change in dollar is the
Degree of Operating Leverage.
Variable Costing
Direct Materials, Direct Labor, and Variable portion of MOH are treated as PRODUCT COST
Direct Materials, Direct Labor, and Variable portion of MOH are treated as PRODUCT COST
Variable Costing
Absorption Cost
Direct Materials, Direct Labor, Variable and Fixed MOH are treated as PRODUCT COST
Direct Materials, Direct Labor, Variable and Fixed MOH are treated as PRODUCT COST
Absorption Cost
Segment Margin
deduction of traceable fixed costs of a segment from segment contribution margin
deduction of traceable fixed costs of a segment from segment contribution margin
Segment Margin
(Absorption Cost vs Variable Cost) when units produced > unit sales then net operating income
is greater than variable costing
Common Fixed Cost
supports operations of more than 1 segment, not traceable in whole or parts
supports operations of more than 1 segment, not traceable in whole or parts
Common Fixed Cost
Segment Break-Even
Segment traceable fixed expense / segment contribution margin ratio
Segment traceable fixed expense / segment contribution margin ratio
Segment Break-Even
Price Variance
diff of actual price and standard price
diff of actual price and standard price
Price Variance
Quantity Variance
diff of actual quantity of the input used and the amount of input that should have been used for actual level of output
Revenue Variance
the difference of how much revenue should be given actual level of activity and actual revenue for the period
the difference of how much revenue should be given actual level of activity and actual revenue for the period
Revenue Variance
Spending Variance
diff of how much cost should be given the actual level of activity and actual amount of cost
diff of how much cost should be given the actual level of activity and actual amount of cost
Spending Variance
Labor Efficiency Variance
diff of actual hour taken to complete task and the standard hours allowed for actual output
diff of actual hour taken to complete task and the standard hours allowed for actual output
Labor Efficiency Variance
Variable Overhead rate
measures diff between actual variable overhead cost incurred and standard cost that should have been incurred during period
measures diff between actual variable overhead cost incurred and standard cost that should have been incurred during period
Variable Overhead Rate
Cost Centers
control over costs, but not revenue and investments funds. (standard variance and flexible budget variance)
control over costs, but not revenue and investment funds. (standard variance and flexible budget variance)
Cost Centers
Profit Centers
control both cost and revenues but not investment funds
control both cost and revenue but not investment funds
Profit Centers
Investment Centers
control over cost, revenue, and investment funds in operating assets
Control over cost, revenue and investment funds in operating assets
Investment Centers
ROI ( Return On Investments)
Net Operating Income / Average Operating Asset or
margin value * turnover
Net Operating Income / Average Operating Asset or
margin value * turnover
ROI (Return on Investments)
Margin Value
Net operating income / sales
Net operating income / sales
Margin Value
Turnover Ratio
Sales / Average operating assets
Sales / Average operating assets
Turnover Ratio
Residual Income
Net operating income - (rate of return * avg operating assets)
Net operating income - (rate of return * avg operating assets)
Residual Income
Profitability Index:
NPV / Investment Required
NPV / Investment Required
Profitability Index
Simple Rate of Return
Annual Incremental Net Operating Income / Initial Investment
Annual Incremental Net Operating Income / Initial Investment
Simple Rate of Return
